Lotte vice chairman found dead amid probe; suicide suspected

[August 26, 2016]  By Hyunjoo Jin and Se Young Lee

SEOUL (Reuters) - One of the top executives at South Korea's Lotte Group was found dead on Friday, a suspected suicide, hours before he was to be questioned by prosecutors conducting a criminal probe into the country's fifth-largest conglomerate.

Lotte Group confirmed the death of Vice Chairman Lee In-won, which comes after the group was riven by a family succession feud last year and subjected in June to widespread raids by government prosecutors.

Lee had been with the group for 43 years and was the most senior executive outside the Shin family that controls the conglomerate, or chaebol. He was a longtime CEO of Lotte Shopping <023530.KS>, one of the group's biggest businesses.

The police said Lee's body was found on Friday morning under a tree along a walking and cycling path near Seoul. They said he had left home around 10 p.m. on Thursday. A four-page note was found in the executive's car parked nearby.

An autopsy showed Lee's death appeared to be a "typical case of death by hanging," which appeared to be suicide, police said.

"When I arrived after the call, the deceased was lying down, crouched here," Hyung Dae-ryong, Seojong precinct police station chief, told reporters gathered at the site.

The deceased, wearing shorts and a black windbreaker, appeared to have hung himself from a tree with a necktie, Hyung told reporters.

A maroon umbrella with the Lotte logo was found nearby.

Lee was the top lieutenant of Chairman Shin Dong-bin, who last year saw off a bitter challenge from his older brother for control of the group founded in 1948 in Japan as a maker of chewing gum by their father, Shin Kyuk-ho, who is now 93.

"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," Lotte Group said in a statement.

Lee was also engaged in finding new growth opportunities for Lotte, the group said.

A prosecution team of about 200 people raided Lotte offices in June, looking into a possible slush fund as well as breach of trust involving transactions among the group's companies, sources said at the time.

Lee, who was 69, had been scheduled to appear before prosecutors on Friday morning, a Lotte official said.

The body of Lotte Group Vice Chairman Lee In-won is wheeled into an ambulance on a stretcher at a hospital in Yangpyeong, South Korea, August 26, 2016. Yonhap/via REUTERS

A South Korean prosecutor, who declined to be identified by name, expressed condolences for Lee's death and said prosecutors planned to reconsider the schedule for the ongoing probe.

INVESTIGATION SETBACK

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 almost on par with that of the owner family members," he said.

The investigation into Lotte had already exacted a devastating toll on its business, which ranges from hotels to retail to chemicals. Its Hotel Lotte unit was forced in June to shelve an initial public offering to raise up to 5.27 trillion won ($4.73 billion), which would have made it the world's largest this year.

Also in June, its Lotte Chemical Corp <011170.KS> unit withdrew from bidding for U.S.-based Axiall Corp <AXLL.N>, citing its difficulties in South Korea. Rival Westlake Chemical Corp <WLK.N> ended up with a $2.33 billion deal for Axiall.

($1 = 1,113.3500 won)

(Additional reporting by Hyun-young Yi, Nataly Pak and Yun Hwan Chae; Writing by Tony Munroe; Editing by Raju Gopalakrishnan)

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