Published: Mon, August 29, 2016
Economy | By Melissa Porter

Lotte Group vice chairman found dead before corruption probe

Lotte Group vice chairman found dead before corruption probe

He is a close friend of the company's chairman Shin Dong-bin.

Lee was to be summoned by prosecutors at 9.30 a.m. Friday on allegations of a breach of trust and other unlawful activities that have rocked the group. Lotte Chemical, for one, is under investigation over unfair business deals as well as alleged tax evasion and fraud.

The body of Lee In-Won was found hanging from a tree near a hiking trail in the eastern town of Yangpyeong.

"He might have been put under emotional pressure (before the prosecutors' summons)", said a high-ranking official at the group.

The police said they found Lee's identification on his clothes and are examining the scene, including his vehicle found near the site of the incident.

Police said that there was no indication that Lee's death could have been a homicide, adding that the exact cause of death will be determined through an autopsy. Police concluded Lee hanged himself on the tree using a tie and a scarf, but that the tree branch snapped.

But the death of a key suspect, who was thought to have been well aware of Lotte Group's irregularities, is expected to further impede the prosecutors' probe. He may have supported the founder and the incumbent chairman in pocketing 30 billion won every year from Lotte's affiliates to create slush funds.

"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", a Lotte Group statement said, according to Reuters.

Lee, 69, joined Lotte in 1973 and held numerous positions as he rose up the ranks over the decades. Lee was the highest-ranking senior executive outside of the Shin family who control the business group. The official confirmed Lee left a note but refused to comment on its contents.

In 2009, former South Korean president Roh Moo-hyun committed suicide after his family was involved in a corruption investigation.

Park Ju-gun, head of corporate analysis firm CEO Score, said Lee's death was likely to hamper the investigation.

"Lee's standing within Lotte was nearly on par with that of the owner family members", he said.

The resultant public furore and criminal investigation has taken a severe toll on the group, including the deferment (and possible scrapping) of a planned IPO for Lotte Duty Free parent Hotel Lotte - at a projected US$4.5 billion, the world's biggest IPO.

In July, sister of Lotte's Chairman was also arrested as part of the probe.

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