Senior Lotte Group executives, including Chairman Shin Dong-bin yesterday publicly apologised and expressed their regrets for any concerns caused by allegations that the company had embezzled millions of dollars in its dealings.

 

As widely expected and along with other executives at the company, Shin Dong-bin was recently indicted on charges of embezzlement and breach of trust, along with tax evasion and allegedly illegal deals said to be worth Won375.5bn ($335m).

 

In a short leading statement at the Seoul Lotte Hotel, which was obviously aimed at taking some of the heat out of the ongoing Korean prosecutor’s interest in the company, a Lotte spokesman told yesterday’s press conference that the company regretted any ‘anxiety’ it may have caused.

 

$35BN INVESTMENT PROMISE

Speaking on behalf of the company and its leader he said: “I deeply apologise to all of the customers, employees and cooperatives who supported Lotte Group until today, for causing anxiety again, with the recent prosecution investigations amid the conflicts over succession of management rights, which have been ongoing since last year.”

 

LOTTE GROUP DENIES ANY WRONGDOING

Meanwhile, it should also be emphasised that the company has denied any wrongdoing, although in his appearance at the press conference with the company’s leading divisional CEOs, Chairman Shin Dong-bin did give an undertaking to make the group more transparent.

 

In his comments at the press conference, Shin Dong-bin said: “I apologise for the worries that have been caused by the recent prosecutorial investigation amid the ongoing power struggle at the company over the last year. I feel we have not met the standards expected by the people and society.”

 

At the same time he gave an undertaking to invest around $35bn and create some 70,000 jobs as part of new restructuring over the next five years. He added that a new internal compliance group would also be created to make the group more responsible.

 

MAJOR LOTTE IPO IS STILL PLANNED

Shin Dong-bin also confirmed that it still plans to go ahead with its original plan to launch an IPO for its Hotel Lotte business as soon as possible. This was cancelled back in June due to the adverse publicity surrounding the company.

 

If this is successful, the company says some of the proceeds could be used to invest in its hotel and duty free companies.

 

Shin Dong-bin is not alone in being indicted at the company, since the prosecutor has also levelled indictment charges at more than 20 other senior company executives. These include Lotte founder Shin Kyuk-ho and his wife, plus his sons and daughters who hold positions within the Lotte Group.

 

Significantly, Chairman Shin Dong-bin has not been taken into custody, although local commentators say it is still a possibility he could be jailed if found guilty at next month’s trial.

 

‘PRESIDENTIAL PARDONS’

However, there is a ‘tradition’ of presidential pardons for Korean businessmen in the past, although these are not always received very well by the Korean public.

 

This latest development also follows the untimely death of Lotte Group Vice President Lee In-won last August, who was found dead just prior to a summons from investigators for questioning, with suicide suspected.

 

[The apology by the Lotte spokesman referred to above can be viewed at the BBC site by following this link: http://www.bbc.co.uk/news/world-asia-37760625]