In a new headache for South Korean retail giant Lotte Group, its boss faces jail terms over bribery and other charges.

Chairman Shin Dong-bin has been accused of giving KW7 billion (US$6.4 million) in bribes to a foundation run by former President Park Geun-hye’s friend Choi Soon-il while seeking favours to win a government licence to run a duty-free business in Seoul, reports The Korea Bizwire.

Prosecutors demanded a four-year jail term for Shin for the alleged bribery, while his lawyers have denied the accusation.

Separately, prosecutors asked a court to hand down a 25-year prison term for Choi, who was at the centre of the corruption scandal that led to impeachment and arrest of Park.

Seoul Central District Court will hand down its judgment on Shin on January 26. The court is also set to issue a separate sentence on Shin next Friday on charges of embezzlement and breach of trust.

Prosecutors suspect Shin paid KW50 billion in wages to people who had never worked for its affiliates, and inflicted KW130 billion in losses on the business group’s subsidiaries by forcing them to cover the losses of other units. Prosecutors have demanded a 10-year jail term.

“We will go through the remaining court procedures in a sincere manner,” says a Lotte official.

Two months ago Lotte established the holding company Lotte Corp in a bid to solidify Shin’s leadership.

Meanwhile, the group is said to have incurred about KW2 trillion in damages in recent months amid the Seoul-Beijing diplomatic spat over the deployment of a US missile defence system in South Korea.

• Original reporting by Yonhap, via Korea Bizwire.