[Yonhap News Photo]
South Korea's embattled fifth-largest conglomerate, Lotte Group, heaved a sigh of relief Thursday after its chairman avoided arrest in a grueling 18-hour marathon debate in court over corruption charges brought by prosecutors.
Group chairman Shin Dong-bin, 61, was released at 4:20 am (1920 GMT) after a Seoul court refused to issue an arrest warrant on charges of embezzlement and breach of trust.
The court's decision eased concern about a managerial vacuum in the group, which has been under an extensive three-month probe into alleged tax evasion, embezzlement and other irregularities by the group's ruling family and executives.
"I feel sorry for causing public concern," Shin told reporters as he walked out of the court, completing an 18-hour session with judges and prosecutors on the validity of his arrest that could deal a serious blow to the corporate image of the sprawling business group founded by an ethnic Korean living in Japan.
"I think there are many things to do," he said, vowing to improve the corporate culture of his group.
The group welcomed the court's decision saying it would step up efforts to normalize troubled group businesses and push ahead with investments and projects which have been put on hold due to an investigation by prosecutors.
Prosecutors had sought an arrest warrant Monday for Shin on charges of embezzling a company fund of more than 170 billion won (155 million US dollars).
Shin was accused of orchestrating shady deals between affiliates and selling the assets of certain affiliates to others at below market prices. He was also suspected of giving large stipends to the owner's family for just being listed as board members of the group's affiliates in South Korea and Japan.
Prosecutors have tried to determine if Shin and other group executives were involved in the creation of slush funds.
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. Lee In-won, a Lotte Group vice chairman, has killed himself before he turned up for questioning by prosecutors.
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.
Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
