SEOUL, Nov. 1 (Yonhap) — Prosecutors demanded a 10-year prison term and a 300 billion-won (US$268 million) fine for Lotte Group founder Shin Kyuk-ho on Wednesday for embezzlement, breach of trust and other charges.
The 95-year-old Shin was indicted in October last year for a series of management irregularities, including ordering Lotte to pay a total of about 50 billion won in the name of wages to family members who had never worked for the company.
Shin was also accused of transferring his shares in Japan-based Lotte Holdings to family members at face value to help the recipients evade about 70 billion won in gift taxes. He was also charged with breach of trust for inflicting losses by giving his mistress the right to run concessions at Lotte Cinema movie theaters.
“Considering his status and role in this crime and the scale of profits he gained directly or via family members, a stern criminal punishment is inevitable for him, even in light of his (advanced) age and health conditions,” prosecutors said.
Prosecutors also said Shin conspired with his son and Lotte Chairman Shin Dong-bin for the crimes.
But Shin’s lawyer claimed that family members, including Shin Dong-joo, a former Lotte Holdings vice chairman, were given wages as the company did not pay them any dividends even though they invested a lot of money in Lotte’s Korean subsidiaries and contributed to their growth.
The lawyer also said that the tax evasion charges involving a share transfer 10 years ago should not be assessed based on the current standards. The lawyer called for leniency, asking the court to allow the aged Shin to exit from the business quietly without his patriotism and management philosophy getting tainted.
Shin, sitting in a wheelchair, said in his final statement that it’s a matter of course to pay his family members’ wages because they worked for the company.
Last week, prosecutors also demanded 10 years in prison for his son and Lotte Group Chairman Shin Dong-bin, a five-year term for his other son Shin Dong-joo, and seven years each for his daughter Shin Young-ja and his mistress Seo Mi-kyung over similar charges.
These irregularities came to light during a fight between Shin’s two sons for control of the group.
Yonhap News | Wednesday, 1 November, 2017