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Billionaire South Korean boss jailed for bribery

Updated 6:30 AM ET, Tue February 13, 2018

Hong Kong (CNNMoney) - A South Korean court has sent another of the country's most powerful bosses to jail.

Shin Dong-bin, the billionaire chairman of conglomerate Lotte Group, was sentenced to two and a half years in prison after he was found guilty of bribery Tuesday.

The trial of Shin, 62, followed a huge influence-peddling scandal that gripped the country and brought down the government of former President Park Geun-hye.

Related: South Korea's corruption scandal ensnares 2nd top boss

Shin was found guilty of bribing a close confidante of Park. Prosecutors said Lotte donated 7 billion won ($6.4 million) to a foundation linked to Park's friend and received a government license for its duty free business in return.

Shin has denied any wrongdoing. In an interview with CNN last year, he said he wasn't worried about ending up behind bars because he's innocent.

Now he's become the latest example of the cozy ties between South Korea's business and political elites. The scandal involving the former president and the country's biggest companies brought hundreds of thousands of protesters into the streets in late 2016.

In the reckoning that followed, Lee Jae-yong, the de facto head of the Samsung business empire, was found guilty of bribery and other charges in August.

Lee walked free last week after his five-year prison sentence was suspended and reduced by an appeals court.

Related: Samsung chief walks free after prison sentence suspended

Lotte said Tuesday that Shin will also appeal.

"We are in misery with this unexpected result," the company said in a statement. "We have pleaded not guilty and defended [Shin] throughout the trial with evidence, but this evidence was not acknowledged and we are dismayed."

The company said it will go into "emergency operating mode" to ease worries amongst employees, customers and investors.

Shares in Lotte's retail division closed down 4% in Seoul.

Shin was convicted on the same day as Choi Soon-sil, the former confidante of President Park. Choi received a 20-year prison sentence for charges including abuse of power, coercion, fraud and bribery.

Park, the country's first female president, is on trial on charges of corruption, coercion and leaking confidential information. She has pleaded not guilty.

Related: South Korea's long history of light sentences for business leaders

Tuesday's convictions come as South Korea hosts the Winter Olympics.

Lotte, like Samsung, is an official partner of the event. It said it will continue to support the games.

It is the latest setback for the family-run conglomerate, whose wide range of businesses include candy, retail, hotels and construction.

Lotte's business in China came under fire last year over a controversial U.S. missile defense system. Dozens of Lotte stores in China closed and work on a theme park in the country was suspended after it agreed to hand over land to the South Korean government to house the system.

-- Jung-eun Kim and Jethro Mullen contributed to this report.


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