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South Korean Executive Dies Before Questioning in Corruption Inquiry Lotte Executive Found Dead Amid South Korean Corruption Inquiry
(about 2 hours later)
SEOUL, South Korea — A top executive at the Lotte Group, one of South Korea’s largest family-controlled conglomerates, was found dead on Friday in an apparent suicide, hours before he was scheduled to appear before prosecutors investigating allegations of corruption at the company.SEOUL, South Korea — A top executive at the Lotte Group, one of South Korea’s largest family-controlled conglomerates, was found dead on Friday in an apparent suicide, hours before he was scheduled to appear before prosecutors investigating allegations of corruption at the company.
The body of the executive, the vice chairman Lee In-won, a close confidant of Lotte’s chairman, Shin Dong-bin, was found under a tree on a riverside footpath in Yangpyeong, near Seoul, the capital, police said. Police said that they believed Mr. Lee hanged himself with a necktie and scarf, but that they planned an autopsy. Lotte also confirmed Mr. Lee’s death.The body of the executive, the vice chairman Lee In-won, a close confidant of Lotte’s chairman, Shin Dong-bin, was found under a tree on a riverside footpath in Yangpyeong, near Seoul, the capital, police said. Police said that they believed Mr. Lee hanged himself with a necktie and scarf, but that they planned an autopsy. Lotte also confirmed Mr. Lee’s death.
Police said that they had found a suicide note in Mr. Lee’s car, Yonhap, the national news agency, reported. Mr. Lee had left his home in Seoul on Thursday evening, telling his family that he was going out for exercise, Yonhap reported.Police said that they had found a suicide note in Mr. Lee’s car, Yonhap, the national news agency, reported. Mr. Lee had left his home in Seoul on Thursday evening, telling his family that he was going out for exercise, Yonhap reported.
The death of Mr. Lee, 69, came just as prosecutors were stepping up their investigation into Lotte. They questioned another senior Lotte executive, Hwang Kag-gyu, on Thursday. The questioning of the executives was widely seen as a precursor to the summoning of Mr. Shin, who controls Lotte, the fifth largest among the chaebol, or family-controlled conglomerates, that dominate the South Korean economy.The death of Mr. Lee, 69, came just as prosecutors were stepping up their investigation into Lotte. They questioned another senior Lotte executive, Hwang Kag-gyu, on Thursday. The questioning of the executives was widely seen as a precursor to the summoning of Mr. Shin, who controls Lotte, the fifth largest among the chaebol, or family-controlled conglomerates, that dominate the South Korean economy.
The pressure on Lotte illustrates the latest challenge to South Korea’s chaebol, which are important to the Asian country’s economy. In previous decades they helped turbocharge South Korea’s economy and make it an industrial powerhouse. But their conduct has come under increasingly scrutiny in recent years, with officials worrying that recurring allegations of corruption and other misbehavior among the families controlling them could further stoke public discontent over growth income inequality and a slowing economy.The pressure on Lotte illustrates the latest challenge to South Korea’s chaebol, which are important to the Asian country’s economy. In previous decades they helped turbocharge South Korea’s economy and make it an industrial powerhouse. But their conduct has come under increasingly scrutiny in recent years, with officials worrying that recurring allegations of corruption and other misbehavior among the families controlling them could further stoke public discontent over growth income inequality and a slowing economy.
Lotte, a household name in South Korea, runs hotels, shopping malls, movie theaters, apartment buildings and burger joints across the country. In recent months, Mr. Shin and his brother, Dong-joo, have accused each other of embezzlement and other crimes in a bitter public squabble over the control of the business empire built by their father, Shin Kyuk-ho, now 93. Lotte has 310,000 people on its payroll at home and abroad, and its 80 subsidiaries posted 93 trillion won, or $83 billion, in revenue in 2014.Lotte, a household name in South Korea, runs hotels, shopping malls, movie theaters, apartment buildings and burger joints across the country. In recent months, Mr. Shin and his brother, Dong-joo, have accused each other of embezzlement and other crimes in a bitter public squabble over the control of the business empire built by their father, Shin Kyuk-ho, now 93. Lotte has 310,000 people on its payroll at home and abroad, and its 80 subsidiaries posted 93 trillion won, or $83 billion, in revenue in 2014.
Partly working on tips resulting from the sibling squabble, prosecutors raided Lotte offices in June to collect evidence of a slush fund the group was accused of creating through illegal deals among subsidiaries. Lotte has said it is cooperating.Partly working on tips resulting from the sibling squabble, prosecutors raided Lotte offices in June to collect evidence of a slush fund the group was accused of creating through illegal deals among subsidiaries. Lotte has said it is cooperating.
In July, Shin Young-ja, a 73-year-old sister of the Lotte chairman, was arrested on charges of accepting bribes from a local cosmetics company that sought access to Lotte’s duty-free outlets.In July, Shin Young-ja, a 73-year-old sister of the Lotte chairman, was arrested on charges of accepting bribes from a local cosmetics company that sought access to Lotte’s duty-free outlets.
In South Korea, prominent people targeted in criminal investigations have occasionally ended their own lives, apparently trying to avoid public humiliation and imprisonment or to thwart investigations and protect their families or companies.In South Korea, prominent people targeted in criminal investigations have occasionally ended their own lives, apparently trying to avoid public humiliation and imprisonment or to thwart investigations and protect their families or companies.
In 2003, Chung Mong-hun, the chairman of the Hyundai Group, killed himself by leaping from his 12th-floor office window as he faced arrest on charges tied to the $500 million his company had sent to North Korea to win business rights. Roh Moo-hyun, the former president of South Korea, killed himself by jumping off a cliff near his retirement home in 2009 after he was questioned by state prosecutors in connection with a corruption scandal. In April 2015, a businessman named Sung Wan-jong hanged himself from a tree hours before he was scheduled to appear before prosecutors seeking corruption charges.In 2003, Chung Mong-hun, the chairman of the Hyundai Group, killed himself by leaping from his 12th-floor office window as he faced arrest on charges tied to the $500 million his company had sent to North Korea to win business rights. Roh Moo-hyun, the former president of South Korea, killed himself by jumping off a cliff near his retirement home in 2009 after he was questioned by state prosecutors in connection with a corruption scandal. In April 2015, a businessman named Sung Wan-jong hanged himself from a tree hours before he was scheduled to appear before prosecutors seeking corruption charges.
Mr. Lee, widely regarded as the No. 2 in Lotte, was one of the professional executives commonly known in South Korea as vassals, for their loyalty to the families that control the business empires. These executives rarely betray their bosses during corruption investigations.Mr. Lee, widely regarded as the No. 2 in Lotte, was one of the professional executives commonly known in South Korea as vassals, for their loyalty to the families that control the business empires. These executives rarely betray their bosses during corruption investigations.
In the note found in Mr. Lee’s car, he remained loyal to Mr. Shin, calling him “a respectable man” and apologizing to Lotte employees and managers for leaving them in a crisis, Yonhap reported. Mr. Lee also denied that Lotte operated a slush fund.In the note found in Mr. Lee’s car, he remained loyal to Mr. Shin, calling him “a respectable man” and apologizing to Lotte employees and managers for leaving them in a crisis, Yonhap reported. Mr. Lee also denied that Lotte operated a slush fund.
There was no immediate reaction from Mr. Shin.There was no immediate reaction from Mr. Shin.
Prosecutors expressed condolences for Mr. Lee’s death. They had planned to question him as they considered charges of embezzlement and breach of trust in connection with the alleged slush fund for Mr. Shin and helping him and his father evade taxes.Prosecutors expressed condolences for Mr. Lee’s death. They had planned to question him as they considered charges of embezzlement and breach of trust in connection with the alleged slush fund for Mr. Shin and helping him and his father evade taxes.
Mr. Lee joined Lotte in 1973 and rapidly climbed Lotte’s hierarchy under Shin Kyuk-ho. He had been such a close aide to Mr. Shin that he knew what his boss thought by “simply looking him in the eye,” South Korean media reported, quoting people inside Lotte. Recently, he supported Shin Dong-bin in the sibling dispute.Mr. Lee joined Lotte in 1973 and rapidly climbed Lotte’s hierarchy under Shin Kyuk-ho. He had been such a close aide to Mr. Shin that he knew what his boss thought by “simply looking him in the eye,” South Korean media reported, quoting people inside Lotte. Recently, he supported Shin Dong-bin in the sibling dispute.