Shinsegae Group vice chairman Chung Yong-jin will step down as board director of Shinsegae Co. and E-Mart, the retail giant said Wednesday amid ongoing prosecution’s investigations into those companies.

The prosecution has for months been looking into whether Chung ordered Shinsegae affiliates to back their sister bakery firm, Shinsegae SVN, and allegations that E-Mart spied on its employees to discourage union activities.

The CEOs of each Shinsegae affiliate will lead existing businesses while Chung will work on the conglomerate’s future growth engines, Shinsegae Group said in a statement.

“Vice chairman Chung’s resignation as board director, a matter discussed since 2011, is to strengthen responsible management by the professional CEOs of each affiliate,” it said.

The group added that Chung’s quitting had nothing to do with the prosecution’s probes.

The investigations came as the prosecution, the antitrust watchdog and even the police are gearing up to scrutinize conglomerates under President-elect Park Geun-hye’s strong pitch for “economic democratization” and sanctions against unfair practices by chaebol.

Chung’s fellow chaebol heirs Chey Tae-won of SK and Lee Jay-yong of Samsung have also backed off from taking legal responsibility for management. Chey quit as head of SK Group’s top decision-making panel in December, before he was jailed in January on charges of embezzlement. Lee continued to stay out of the board of Samsung Electronics this year despite market expectations that the vice chairman would take greater responsibility.

Shinsegae Co., which runs department stores, and discount store chain E-Mart are set to replace most other board directors as well in a shareholders’ meeting.

Chung has been director of Shinsegae Co. since March 2010 and E-Mart since May 2011.

Two weeks ago, the prosecution grilled him for 12 hours over allegations that he ordered Shinsegae affiliates to charge bakery firm Shinsegae SVN cheaper commissions to help turn it around. Chung’s sister sold off her controlling stake in Shinsegae SVN in December while the probe was ongoing.

Also that week, the Seoul Regional Labor Administration raided E-Mart headquarters and several E-Mart stores to search for evidence that the company had spied on its employees to keep them from joining the union.

By Kim So-hyun (sophie@heraldcorp.com)