Lotte Chairman Jailed in Bribery Case That Toppled President

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A Seoul court jailed Lotte Group Chairman Shin Dong-bin after convicting the tycoon of bribery for his role in a scandal that toppled South Korea’s former president, creating a vacuum atop the nation’s largest retail conglomerate.

Shin was sentenced to 30 months in prison after the Seoul Central District Court found him guilty of charges stemming from Lotte’s decision to give 7 billion won ($6.5 million) to a confidante of President Park Geun-hye, allegedly in exchange for government favors in providing a license to operate duty-free stores. Prosecutors had sought a four-year jail term.

He becomes the second head of a top conglomerate to be imprisoned for seeking to curry favor with impeached President Park by bribing one of her confidantes. The de-facto head of technology giant Samsung Electronics Co. was jailed last year in a related trial but he was unexpectedly released last week on appeal, in a ruling that was perceived as a setback to government pledges to curtail the power of the nation’s corporate elite.

Read more here about South Korea’s effort to reform chaebol.

Shin, who turns 63 on Wednesday, was also fined 7 billion won. He can appeal the ruling with the Seoul High Court.

The chairman, who’s been running the retail-to-chemicals giant as chairman since 2011, had been seeking to invest billions of dollars to expand overseas. Then, a series of crises struck.

Turmoil first erupted in 2015, when a family fracas spilled into public view as Shin’s older brother led a boardroom coup that failed. After that, Lotte grappled with corruption investigations and intensifying regulatory scrutiny, which took a toll on the group’s businesses, with Lotte canceling a potential $4.5 billion initial public offering of a unit and withdrawing a bid for chemical-maker Axiall Corp. in 2016. Last year, Lotte was caught in a diplomatic row with China after the company offered its land to the Korean government, which sought to install a controversial U.S. missile defense system opposed by China.



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