Just days into the job, South Korea’s new President Moon Jae-in has accepted the resignation of Seoul’s Chief Public Prosecutor General Kim Soo-nam and ordered a new wide-ranging investigation into former President Park Geun-hye and her confidant Choi Soon-sil’s ‘charity fund-raising activities’.

 

Both Park and Choi remain in detention awaiting trial as they face multiple corruption charges. These allege that they fraudulently attempted to try and obtain multi-million dollar ‘charitable donations’ from large companies – many engaged in duty free business.

 

As reported by TRBusiness last November, Choi was originally accused of seeking multi-million dollar ‘contributions’ for two charity foundation organisations from the Lotte Group, Shinsegae and several other companies, including Samsung, Hyundai, SK Group and the LG Group.

 

PRESIDENT MOON ALSO LOOKING AT KOREA CUSTOMS…

However, prosecutors have since dropped the charges against all these companies apart from the Lotte Group, whose Chairman Shin Dong-bin was charged with allegedly providing the equivalent of $6m-worth of funds to the K-Sports Foundation – via President Park’s friend Choi Soon-sil.

 

Seoul Central District Prosecutors have since alleged that Lotte Chairman Shin paid the money to Choi in return for business favours – including a new downtown duty free license at the Lotte World Tower in Seoul – although he denies all the charges.

 

President Moon is also said to be looking into the Korea Customs Service’s (KCS) recent announcement that it plans to cancel Lotte Group’s Seoul World Tower duty free license if its Chairman Shin Dong-bin is convicted of bribery charges. The license was restored to Lotte last December.

 

Meanwhile – and as reported – prosecutors have dropped all previous bribery charges levelled against SK Group Chairman Chey Tae-won, after determining that no monies were offered by him or his company. This is despite donation approaches being made to the company by Choi.

 

Last, but not least (for now), incoming President Moon has also promised to try and take some of the sting out of the much-deteriorated relationship between Seoul and Beijing.

 

CHINA CONTINUES TO PRESSURE SOUTH KOREA

While China has never formally acknowledged any negative actions towards South Korea, it has clearly been putting local Chinese tour companies under pressure to send its Chinese tourists anywhere other than Seoul.

 

Not surprisingly, the impact of this has severely hit both tourism and duty free shopping very hard in what was the world’s single biggest duty free market at $8bn-plus.

 

So much so that the Korea Development Bank (KDB) Research Center is even predicting that the Korean economy could potentially face a $20bn overall loss in trade this year due to this ‘China crisis’.

 

Added to all of this, Moon and South Korea also have other problems and most notably the continued test firings of missiles by North Korea. During his presidential campaign, Moon did declare his intention to try and mediate with North Korea in an effort to improve relations, but two more test missiles have since been fired by North Korea as relations remain strained.

 

See also: https://www.trbusiness.com/regional-news/asia-pacific/prosecutors-indict-shin-but-clear-sk-groups-chey/118700