Omnidirectional Corruption
The prosecution found that Lotte Shopping has embezzled approximately 300 billion won (US$260 million), while incurring an investment loss of three trillion won (US$2.6 billion) or so, by purchasing Chinese companies at inappropriate prices.
Lotte Shopping began to invest in China in 2008 by setting up Lotte Shopping Holdings in Hong Kong and Singapore. According to the prosecution, Lotte Shopping embezzled the money during the course of acquisition of Times and LuckyPai. The former is a local supermarket chain that has 65 stores in China and the latter is an infomercial company.
The Lotte Group’s suspicious transactions based on an overseas paper company and stock trading have been detected as well. A number of the group’s subsidiaries, including Lotte Shopping, Hotel Lotte, Lotte Midopa and Lotte Data Communication Company, are involved in such transactions led by the policy headquarters of the group via Lovest, a special-purpose company established in Switzerland by general chairman Shin Kyuk-ho. These subsidiaries paid higher prices while buying Lovest’s Lotte Corporation shares. The difference in value, estimated to reach tens of billions of won, is assumed to have been pocketed by the owner of the group.
Besides, according to prosecutors, Lotte Chemical let in Lotte International and Lotte Corporation Japan when importing raw materials from foreign business partners in order to raise slush funds and these funds have gone to Japan. Under the circumstances, they are looking to work with the country’s judiciary to look into Lotte Group Japan as well.