Lotte woes deepen as Park probe snares chairman

The indictment of Lotte Group chairman Shin Dong-bin in the bribery scandal that has led to the ouster of former President Park Geun-hye plunges one of South Korea’s largest conglomerates deeper into crisis.Shin, 62, was charged with giving 7bn won ($6.2mn) to a sports foundation controlled by a confidante of Park, seeking support for regaining a duty-free operating licence at Lotte World Tower, according to a statement by prosecutors. Park was also formally indicted yesterday.Shin won’t be held in detention, while Samsung Electronics heir Jay Y Lee has been detained since late February and indicted on bribery charges he denies. The charges yesterday mark the first time a Lotte official has been formally accused of involvement in the influence-peddling scandal. Shin, his older brother Shin Dong-joo and his father were indicted last October in a separate probe over alleged embezzlement and breach of fiduciary duty.Lotte has also been treated in recent weeks to retaliation from China over the conglomerate’s decision to provide some land for US deployment of a missile defence system in South Korea. Chinese authorities have suspended some Lotte Mart stores in the mainland because of alleged fire-safety violations, while a venture with Hershey Co has been told by Chinese authorities to stop production for a month.The law firm representing Shin was not immediately available for comment. Lotte Group regrets the prosecutors’ decision to indict, it said in an e-mailed statement.“The 7bn won donation was planned to be paid through official donation process as part of the company’s social responsibility,” Lotte said in the statement. “And Lotte went through more than two months of negotiations to find ways to cut down the amount and to provide support by providing construction rather than giving cash. If it had been for supports seeking preferential treatment, it must have been impossible. Lotte will explain this at the trials.”Along with the indictment, Shin is battling his older brother Shin Dong-joo for control of a group their father, now 94-years-old, built into an empire encompassing hotels, retail, theme parks, chemicals makers and assets including Guylian Belgian chocolates and New York’s Palace Hotel.Park’s indictment follows months of street protests as the corruption scandal unfolded, culminating in her ouster and arrest last month. Park, who denies wrongdoing, faces allegations that she abused her powers and colluded with friend Choi Soon-sil and former aides to get bribes and seek favours from top businesses.