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Friday
Aug262016

Lotte Group vice chairman found dead hours before questioning by prosecutors

One of South Korea's top executives was found dead on a walking trail Friday morning in Gyeonggi Province in an apparent suicide.

Lotte Group vice chairman Lee In-won, 69, the closest aide to Lotte chairman Shin Dong-bin, was found hanging from a tree.

Police found a four-page suicide note in a car parked nearby.

Lee, pictured above, was scheduled to appear at the Seoul Central District Prosecutors' Office at 9 a.m. Friday. Prosecutors are investigating an alleged slush fund amassed by Lotte Group founder Shin Kyuk-ho and chairman Shin.

The Korea Times said,

In the [suicide] note, Lee called the chairman a "good person" and wrote he "feels sorry for leaving early." He said "there are no slush funds in Lotte."

Lotte is Korea's fifth biggest chaebol or family-controlled conglomerate. It has more than 60 business units employing 60,000 people. It is best known for its retail business. Other units include hotels, financial services, heavy chemicals, electronics, IT, construction, publishing, and entertainment. It's also the biggest candy maker in Korea.

Lee joined the group in 1973 and "worked closely with group founder Shin Kyuk-ho and chairman Shin Dong-bin for many years," the Korea Times said.

Prosecutors have alleged the founder and chairman took more than $25 million a year from the group's affiliates for the slush fund. The two have been under a travel ban since July.

"Members of the owner family are also suspected of cooking the accounting books by exaggerating profits and unfairly helping their relatives' firms win bids for business contracts," the Korea Times said.

In July, police arrested the founder's oldest daughter, Shin Young-ja, for bribery and embezzlement.

She allegedly took about $2.5 million from companies in return for placing their products in favorable spots at Lotte's duty free shops, the Korea Times said.

She's also accused of embezzling about $3.5 million from Lotte by collecting salaries for her three daughters who she listed as board members of a related company.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He'll be the keynote speaker at the FCPA Blog NYC Conference 2016