[Yonhap News Photo ]
Prosecutors sought a court-issued warrant Monday to arrest the chairman of South Korea's fifth largest family-run conglomerate, Lotte Group, triggering concern about a managerial vacuum in the embattled group.
The move followed an extensive three-month probe into alleged tax evasion, embezzlement and other irregularities by the group's ruling family and executives.
Group chairman Shin Dong-bin, 61, was questioned for 18 hours six days ago on suspicion of embezzling a company fund of some 200 billion won (181 million US dollars). His arrest would deal a serious blow to the corporate image of the sprawling business group founded by an ethnic Korean living in Japan.
Shin is suspected of orchestrating shady deals between affiliates and selling the assets of certain affiliates to others at below market prices. He is also suspected of receiving some 10 billion won in yearly stipends.
Prosecutors have also tried to determine if Shin and other group executives were involved in the creation of slush funds totaling some 30 billion won by the group's construction arm.
Lotte's ailing founder Shin Kyuk-ho and his eldest son, Shin Dong-joo, have already been questioned. The founder is suspected of dodging taxes when he transferred a 6.2-percent stake in Lotte Holdings to family members. Lotte Holdings is the group's de facto holding firm based in Tokyo.
Shin Young-ja, the founder's 74-year-old daughter, was arrested on July 7 on charges of taking kickbacks from a cosmetics firm in return for favorable placement in Lotte's duty-free shops.
Last month Lee In-won, a Lotte Group vice chairman, hanged himself on a tree in an apparent suicide before he turned up for questioning by prosecutors over alleged business irregularities.
The investigation followed a protracted family feud involving the founder's two sons that fueled public concern and resentment. The founder has been in his dotage without making a clear decision on group affairs.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
