Lotte heaves sigh of relief for chairman's release from prison

By Lim Chang-won Posted : October 5, 2018, 17:53 Updated : October 5, 2018, 17:53

[Yonhap Photo]


SEOUL -- South Korea's fifth largest conglomerate Lotte heaved a sigh of relief as its chairman walked free with his jailed sentence suspended by an appeals court, nearly eight months after he was arrested for bribery.

Lotte was put under emergency management controlled by a body of top executives following an unexpected imprisonment of group leader Shin Dong-bin in February when a court sentenced him to two years and six months in prison on charges of bribing Choi Soon-sil, the crony of South Korea's ousted ex-president Park Geun-hye.

Shin, 63, was released on Friday after the High Court in Seoul suspended the sentence for four years, saying he had no other option to accept Park's request for the fear of being disadvantaged in business activities and because "the freedom of decision was rather limited."

"We respect the court's wise judgment," the group said in a statement, adding it would work hard to put into shape "things that have not been going smoothly."

The Lotte chairman was found guilty of providing seven billion won ($6.29 million) to a foundation run by Choi in return for favors related to a duty-free shop. The verdict came after the group became the prime target of China's trade retaliation that began after the group let US troops set up a missile shield in its golf course in 2016.

The group, which has invested an enormous amount of money in China, is scaling down its department store business in Asia's largest market following the withdrawal of its troubled hypermarket chain hit by a prolonged consumer boycott.

Like other family-run conglomerates, the ruling Shin family has controlled Lotte by using a complex web of cross-shareholdings among affiliates. Initially, Shin had sought the realignment of group structure to enhance corporate governance, but his campaign has been delayed for various reasons such as an investigation by prosecutors into Lotte's illegal business activities.

Shin Dong-joo, the chairman's elder brother, been locked in a protracted fraternal feud over control of Lotte, which was founded by Shin Kyuk-ho, 95, who has been in his dotage without making a clear decision on his successor.
 
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