While its Chinese operation has fallen under a barrage of retaliations from Beijing for yielding a site for a U.S. weapons system, Lotte Group at home is entirely preoccupied with a court trial involving five members of the founding family over various management irregularities that came to be known during the sibling power struggle.

The Seoul Central District Court on Monday held the first trial on the case against Shin Kyuk-ho, Lotte Group founder and his sons Shin Dong-bin, Lotte Group chairman, and Shin Dong-joo, former vice chairman of Japan-based Lotte Holdings on multiple charges including embezzlement and breach of trust. Shin Young-ja, founder’s daughter and head of Lotte Foundation who is serving jail terms on a separate charge as well as Seo Mi-kyung, the founder’s common-law wife also appeared in court. The day’s judicial proceeding was limited reading the charges against the Shin family members due to Shin Kyuk-ho’s old age. The Lotte Group founder is 95 years old.

Shin Dong-bin, the conglomerate’s sitting chairman, is accused of paying out salaries amounting 50.8 billion won ($45 million) to Shin family members for works that were never executed on top of causing 77.4 billion won in losses to Lotte Shopping by illegally leasing out Lotte Cinema’s concession stand management rights. He is also charged with bringing about a loss of 47.1 billion won to the group by ordering three Lotte companies - Korea Seven Co., Lotte Data Communication Co., and Lotte.com Inc. - to help out cash-stricken Lotte PS Net Inc.

Shin Kyuk-ho, the founder of the group, is put on trial for embezzlement and tax evasion charges worth 85.8 billion won as well as breach of trust. He is also accused of illegally furnishing works to Lotte Cinema for unfair gains worth 77.8 billion won and causing losses worth 9.4 billion won to Lotte affiliates by thrusting them with unlisted stocks at higher than fair value.

Shin Dong-joo, former vice chairman of Lotte Holdings Japan - the de facto holding company of Lotte Group, is charged with collecting 39.1 billion won in salary for free while Shin Young-ja and Seo are accused of tax evasion and illegally leasing concession stands at Lotte Cinema.

By Lee Hyun-jung

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