Lotte in Shock After Chairman Is Jailed
The Lotte confectionery and retail empire was flustered on Tuesday after its chairman Shin Dong-bin was sentenced to two-and-a-half-years in jail for bribery.
Shin will mark his 63rd birthday on Thursday in a prison cell.
The verdict throws a spanner in the works of Shin's goal of turning Lotte into Korea's fifth-largest conglomerate with annual sales of W100 trillion (US$1=W1,086). The plan involved all of Lotte's overseas operations in Southeast Asia, the U.S. and Europe. "The global project requires decision-making from the chairman, so we will inevitably face major difficulties," one Lotte executive said.
The Korean business community was rattled. One staffer with a business lobbying group said, "How can business owners ignore demands made by the president or other influential officials? Viewing compliance as bribes will make it impossible for private businesses to help the government."
Some complained that judges seemed to mete out different rulings according to different circumstances. Samsung chief Lee Jae-yong was cleared on appeal over donations he made to the bogus K-Sports foundation ex-President Park Geun-hye and her confidante Choi Soon-sil set up, but Shin was convicted over a similar, much smaller payment.
The staffer said, "I don't know what the difference is between the charges involving Samsung and Lotte. I think the court has failed to provide a clear standard."
Bae Sang-keun, an executive director of the Federation of Korean Industries, expressed worries over Lotte's future.
"Lotte boosted new hires by more than 30 percent over the last five years even as it suffered from a Chinese boycott, and it's very unfortunate to see the chairman jailed. I hope that the latest ruling does not have a negative impact on Lotte's investments and new hires."