Lotte Homeshoppings license may be revoked By Park Jin-hai Shin Heon, former Lotte Homeshopping CEO Lotte Homeshoppings future hangs in the balance as a former senior staff member has received a prison term in its worst bribery scandal. Shin Heon, 60, who headed the television-based retailer Lotte Homeshopping from 2008 to early 2012, has been sentenced to two years in prison by the Seoul Central District Court on Friday for receiving a kickback from suppliers. Following his court sentence, industry watchers say that the chances are high that Lotte Homeshopping may have to exit from the market. Prime Minister Chung Hong-won in his recent meeting with small and medium sized entrepreneurs revealed the government intention to drive homeshopping organizations involved with repeated unfair business practices out of the market. He is accused of receiving cash bribes and expensive paintings from three companies including venture companies and a catalogue maker in return for favorable treatment in homeshopping launching between October 2007 and February of this year. The total amount of the kickbacks amounted to 133 million won. Shin resigned from the post of chief executive of Lotte Shopping in April. The Ministry of Science, ICT and Future Planning also said that in its process of license renewal, it will thoroughly probe homeshopping companies malpractices and will either revoke the renewal of the offenders or shorten the already approved license period. All TV homeshopping firms should regain the approval from the Korea Communications Commission every five years. The company should renew the business license in May. If not they cannot run the business. Shin was also accused of embezzling 302.7 million won when he colluded with his subordinates to overbook the interior design costs. In its ruling, the court says Shins offence was severe and it gave the sentence aiming to break the cycle of corruption since small businesses and consumers should bear the brunt of the corruption. In July, former and current executives at Lotte Homeshopping were also sentenced to prison terms for embezzling hundreds of millions won from their subcontractors using their status as the client. They embezzled a total of 650 million won from company coffers in 2008-2012 by inflating the invoices from interior subcontractors shaving off the difference. Lotte Homeshopping official and MD has also been given a prison term for taking bribes from suppliers in return for prime time spots on Lotte Homeshopping programs. [email protected],
Posted on: Tue, 25 Nov 2014 08:09:19 +0000