Seoul trial opens for family that runs Lotte

SEOUL - Four members of the family that controls South Korea's troubled retail giant Lotte, including its 94-year-old founder, went on trial on Monday on charges of embezzlement, tax evasion and fraud.

The proceedings against company Chairman Shin Dong-bin, 61, and his brother, sister and father - as well as the patriarch's mistress - come as Lotte, South Korea's fifth-biggest conglomerate, provided land to Seoul to host a US missile defense system.

The trial is the latest blow to the reputations of the family-controlled conglomerates, or chaebols, that have powered South Korea's economic growth in recent decades.

They have increasingly become the focus of public anger over inequality and corruption, including the scandal that saw president Park Geun-hye removed from office earlier this month.

Lotte Chairman Shin is accused of costing the firm 175 billion won ($156.6 million) through a series of tax evasions, financial scams and irregularities.

He has also been charged with negligence for awarding lucrative deals or paying supposed wages worth millions of dollars to relatives who made little contribution to management.

"I am sorry for causing concern. I will cooperate with the trial sincerely," Shin told reporters, bowing briefly before entering the courtroom on Monday afternoon.

Similar charges were lodged against his elder brother, Shin Dong-joo, his elder sister, Shin Young-ja, and their father, Shin Kyuk-ho.

Their father's 57-year-old mistress was also charged with embezzlement for pocketing large sums in "wages", although she had little role in management.

The five were formally indicted by prosecutors in October.

Their alleged offenses were not directly connected to the scandal that brought down Park.

The Seoul-based group, founded in Tokyo in 1948, has a vast network of businesses in South Korea and Japan with combined assets valued at more than $90 billion.

The Shin family became targets of state probes after 2015, when a bitter, public fight between the two brothers for control of the group fanned public anger over how South Korea's dominant family-run conglomerates conduct business.

The feud saw highly public mudslinging between Shin Dong-bin and Shin Dong-joo, with accusations of mismanagement, personality flaws and manipulation of their frail father. The dispute ended after board members sided with Shin Dong-bin, but Lotte has since come under tougher regulatory scrutiny.