A court in Seoul, South Korea, on Friday convicted Shin Dong-bin, the chairman of the multinational Lotte Group, of embezzlement and breach of trust in connection with a corruption scandal, according to the Yonhap news agency.
The court handed down a suspended prison sentence against Mr. Shin, however, effectively allowing him to continue running the group’s vast business empire.
The verdict upended expectations that South Korea would no longer let the leaders of its powerful, family-run conglomerates — known as chaebol — break the law with impunity. Those hopes were raised this year when Lee Jae-yong, the third-generation heir to the Samsung corporate empire, was sentenced to five years in prison for bribery.
The judgment in Mr. Shin’s case extended a long history of corporate leaders’ being indicted on criminal charges but avoiding the harshest punishments. The decision suggested that change would not be immediate, or happen across the board.
Mr. Shin’s father, Shin Kyuk-ho, 95, who founded Lotte, was sentenced to four years in prison in the case, according to Yonhap. But the court, taking his age into consideration, did not order his imprisonment. Other relatives of the chairman were acquitted or given lighter sentences than those sought by prosecutors.
Prosecutors took the rare step last year of indicting the entire family running Lotte on embezzlement, tax evasion and other charges. Shin Dong-bin was accused of arranging for relatives to receive bogus salaries from Lotte subsidiaries, of arranging for Lotte units to buy another affiliate’s stocks at inflated prices and of granting contracts to a company owned by a relative without competitive bidding.
Lotte is an inescapable presence in South Korea, overseeing hotels, shopping malls, amusement parks, movie theaters, duty-free stores, coffee shops and fast-food restaurants. The company and other chaebol have been the engines that have propelled South Korea’s transformation over the past half-century into a prosperous, export-driven economy.
The country’s authorities have long been accused of using special treatment with business titans who break laws. Critics say officials shy away from harsher punishments to avoid threatening economic growth.
Mr. Lee, the Samsung heir and de facto head of its lucrative electronics unit, and top aides were convicted in August of using bribes to cement the Lee family’s control over Samsung’s businesses. The scandal had already contributed to the toppling of South Korea’s president, Park Geun-hye.
Mr. Lee is appealing his sentence. His absence from Samsung Electronics does not appear to have harmed the company’s ability to sell smartphones and televisions in huge quantities, and to earn enormous amounts doing so. The company reported a record profit of $13 billion in the latest quarter.