Lotte Group in another crisis after top executive found dead

Vice Chairman Lee In-won died in a suspected suicide hours before he was supposed to appear before prosecutors investigating corruption allegations in South Korea's fifth largest conglomerate.

Photo by: Reuters
Photo by: Reuters

Inspectors examine the car owned by Lotte Group Vice Chairman Lee In-won at a police station in Yangpyeong, South Korea.

One of the top executives at South Korea's Lotte Group was found dead on Friday, seen as a suspected suicide, hours before he was to be questioned by prosecutors conducting a criminal probe into the country's fifth-largest conglomerate.

Lotte confirmed the death of Vice Chairman Lee In-won, which comes after the group was subjected in June to the widespread corporate raids by government prosecutors investigating corruption allegations.

Lee had been with the group for 43 years and was the most senior executive outside the Shin family that controls the conglomerate.

He was a longtime CEO of Lotte Shopping, one of the group's biggest businesses.

The police said Lee's body was found on Friday morning under a tree along a walking and cycling path near Seoul. 

The deceased, wearing shorts and a black windbreaker, appeared to have hung himself from a tree with a necktie. A maroon umbrella with the Lotte logo was found nearby. 

"It is difficult to believe," Lotte Group said in a text message to reporters. 

South Korean prosecutors are investigating allegations of embezzlement, and tax evasions at Lotte Group.

Lotte Group Chairman Shin Dong-bin and Vice Chairman Lee In-won (R) attend an opening ceremony for Lotte Miso Microcredit Bank in Seoul, South Korea, in 2009. Reuters.

In July, sister of Lotte’s Chairman was also arrested as part of the probe. Shin Young Ja is accused of taking bribe from a cosmetic maker against preferential treatment for its products at Lotte’s stores. 

This is another setback for the group, which has seen a bitter feud between the heirs – the two sons of its founder, the 93-year-old Shin Kyuk-ho, who started off in 1948 selling chewing gum. 

Lee was the top lieutenant of Chairman Shin Dong-bin, who last year saw off a bitter challenge from his older brother for control of the group.

"He (Lee) oversaw Lotte Group's overall housekeeping and core businesses and accurately understood the minds of Chairman-in-Chief Shin Kyuk-ho and Chairman Shin Dong-bin to be carried out well in subsidiary companies," Lotte Group said in a statement.

Lee was also engaged in finding new growth opportunities for Lotte, the group said.

The investigation into Lotte had already exacted a devastating toll on its business, which ranges from hotels to retail to chemicals. 
Its Hotel Lotte unit was forced in June to shelve an initial public offering to raise up to $4.73 billion, which would have made it the world's largest this year.

Also in June, its Lotte Chemical unit withdrew from bidding for US-based Axiall, citing its difficulties in South Korea. Rival Westlake Chemical ended up with a $2.33 billion deal for Axiall.

The group has over $80 billion in annual sales.

TRTWorld and agencies