You are here

Seoul court denies arrest warrant for Lotte Group chairman

Thursday, September 29, 2016 - 12:37

40009309 - 28_09_2016 - LOTTE GROUP-PROBE_.jpg
A South Korean court rejected a request by prosecutors for a warrant to arrest Lotte Group Chairman Shin Dong-bin in the latest twist in a wide-ranging corruption probe that has convulsed the country's fifth-largest family-run conglomerate.

[SEOUL] A South Korean court rejected a request by prosecutors for a warrant to arrest Lotte Group Chairman Shin Dong-bin in the latest twist in a wide-ranging corruption probe that has convulsed the country's fifth-largest family-run conglomerate.

But an investigation that has constricted management since June, derailing plans for billion-dollar deals, isn't about to go away overnight. Prosecutors may re-submit their request, Yonhap news agency reported, and warrant or not, Mr Shin could yet face trial - a process that with appeals could last many months.

A Seoul Central District Court judge said early on Thursday the arrest warrant request had been turned down after a hearing at which Mr Shin, 61, appeared on Wednesday. The court said it didn't views Mr Shin's arrest as necessary.

But Yonhap reported prosecutors were critical of the decision, and were considering re-submitting their request.

sentifi.com

Market voices on:

The prosecutors' probe into the retail to chemicals group had uncovered embezzlement or breach of trust involving about 170 billion won (S$209.7 million), a prosecution source previously told Reuters.

"We regret that the arrest warrant was denied solely based on the explanations of the suspect despite the gravity of the matter," prosecutors said in a statement on Thursday, according to Yonhap.

A spokesman for the prosecution wasn't immediately available for comment.

Lotte, which was forced by the investigation to shelve a planned US$4.5 billion initial public offering of its Hotel Lotte unit in June, said after the court ruling it aimed to return to business as usual as quickly as possible.

Shares in listed units Lotte Shopping and Lotte Chemical rose as investors looked forward to that prospect. "We have a strong intention to do the IPO. After we see what happens with the investigation, we will begin considering it," a spokesman told Reuters. "When prosecutors' investigation concludes, we plan to announce reform measures and social contribution plans, and begin reviewing investment plans again such as M&A."

The Hotel Lotte IPO had been intended in part to bring more transparency and improve corporate governance at the conglomerate, which was widely criticised in South Korea after a bitter public feud last year between Mr Shin and his older brother over who would succeed their father at the head of the group.

In addition to derailing the IPO, the investigation also prompted Lotte Chemical to drop out of bidding for US chemical firm Axiall Corp in June.

It was also the backdrop for the apparent suicide last month of one of the group's top executives, hours before he was due to be questioned by prosecutors.

REUTERS

Nespresso
Pair your daily business read with the perfect cup of espresso.

Subscribe to The Business Times today to receive your very own Nespresso Inissia coffee machine worth $188.

Find out more at btsub.sg/btdeal

Powered by GET.comGetCom