Elderly founder of South Korea's Lotte Group denies charges in dramatic start to graft trial

SEOUL (Reuters) - The 94-year-old founder of Lotte Group, South Korea’s fifth-largest conglomerate, threw his cane to the floor of a court on Monday and demanded to know where he was on the first day of a trial of him and family members.

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Shin Kyuk-ho appeared confused as he entered the court in a wheelchair, and tried to resist aides’ efforts to wheel him out, by dragging his feet.

“Lotte is a company that I made, I have 100 percent of the shares, who indicted me?” the agitated Shin Kyuk-ho shouted upon his return to the court, throwing down his cane.

His lawyer said he denied charges of embezzlement and breach of trust, as the first day of arguments got off to a dramatic start, with the judge asking the Lotte Group founder to be quiet and aides checking his blood pressure.

The investigation behind the trial is separate from the one that led to the recent dismissal of President Park Geun-hye, over suspected corruption linked to dealings with other big conglomerates, including the Samsung Group and SK Group.

In a courtroom packed with lawyers, reporters and members of the public, Lotte Group Chairman Shin Dong-bin, 62, his older brother Shin Dong-joo, and his father and Lotte founder, Shin Kyuk-ho, were in attendance as defendants on Monday.

Prosecutors indicted 22 people at the end of an investigation over several months last year into suspected corruption at Lotte Group.

The elderly group founder, Shin Kyuk-ho, has been indicted for tax evasion, embezzlement and breach of trust, involving a total 223.8 billion won ($200 million).

His son, group chairman Shin Dong-bin, has been charged with embezzlement of about 50.8 billion won ($45 million) and breach of trust over about 124.9 billion won, concerning suspected irregular payments to family members and unlawful support of group companies.

A lawyer for him said the payments in question were organized by the father, Shin Kyuk-ho, without Shin Dong-bin’s involvement.

A lawyer for Shin Dong-bin’s older sister, Shin Young-ja, said she denied breach of trust, adding that a payment under suspicion, from Lotte Cinema to her company, was also organized by Shin Kyuk-ho, and she was not in a position to influence the founder.

Shin Kyuk-ho’s lawyer said he denied all charges, without elaborating.

Lotte Group had been preparing a $4.5-billion initial public offering (IPO) of Hotel Lotte Co Ltd [HTLOT.UL] last year, but shelved the plan after prosecutors’ investigation became public.

South Korea holds a presidential election on May 9 to find a replacement for Park and reform of big family-run conglomerates, known as chaebol, is a campaign issue.

Reporting by Heekyong Yang; Writing by Joyce Lee; Editing by Robert Birsel and Clarence Fernandez