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March 21, 2017

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Lotte family members deny fraud charges

FOUR members of the family who control South Korea’s troubled retail giant Lotte, including its 93-year-old founder, went on trial yesterday for embezzlement, tax evasion and fraud.

The proceedings against company Chairman Shin Dong-bin, 61, his brother, sister and father — plus the patriarch’s mistress nearly 40 years his junior — come as South Korea’s fifth-biggest conglomerate endures a barrage of condemnation from China.

The trial is the latest blow to the reputations of the family-controlled conglomerates, or “chaebols,” that powered South Korea’s economic growth in past decades.

More recently they have increasingly become the focus of public anger over inequality and corruption, as in the scandal that saw President Park Geun-hye removed from office earlier this month.

Lotte Chairman Shin is accused of costing the firm 175 billion won (US$155 million) through a series of tax evasions, financial scams and irregularities.

He has been also charged with negligence for awarding lucrative deals or paying “wages” worth millions of dollars to relatives who made little contribution to management.

“I am sorry for causing concern. I will cooperate with the trial sincerely,” Shin told reporters, bowing briefly before entering the courtroom.

Similar charges were leveled against his older brother Shin Dong-joo, his older sister Shin Young-ja, as well as their father Shin Kyuk-ho.

The nonagenarian arrived in court in a wheelchair, a gray blanket over his legs, but left after about 30 minutes due to health reasons.

His 57-year-old mistress was also accused of embezzlement for pocketing large sums in “wages” although she had little role in management.

It was the first public appearance by former actress and model Seo Mi-kyung after decades spent trying to avoid media attention.

Each of the five denied all the charges against them, which are not directly connected to the scandal that brought down Park.


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