FSS Reports Lotte Card Employees to Prosecutors for Embezzlement in Ten Billion Won Range

Lotte Card employees have sparked controversy by being involved in an embezzlement case exceeding 10 billion won (US$7.55 million).

The Financial Supervisory Service (FSS) announced on Aug. 29 that it had conducted an on-site inspection regarding the recent allegations of embezzlement by Lotte Card employees and reported two Lotte Card employees and the head of a potentially collaborating company to the prosecution on Aug. 14.

According to the inspection results from the FSS, two Lotte Card marketing team employees are suspected of embezzlement in collaboration with the representative of a partner company. The FSS confirmed allegations that the perpetrators made Lotte Card pay 10.5 billion won to the collaborating company in a dubious affiliate contract and subsequently engaged in embezzlement.

These marketing team employees then allegedly embezzled 6.6 billion won out of the 10.5 billion won through a paper company and its affiliated entities. It has been revealed that they used these funds for real estate development investments and the purchase of vehicles and gift cards, among other expenditures.

Meanwhile, incidents of financial misconduct among employees in the financial sector continue to persist this year.

A series of recent events have sent shockwaves through the financial sector, such as a Woori Bank employee involved in an embezzlement case amounting to 70 billion won last year. Even before the settlement of this case, another embezzlement case, this time amounting to 50 billion won, unfolded at BNK Kyongnam Bank. Employees at KB Kookmin Bank had taken advantage of undisclosed information from listed companies to pocket illicit gains in the range of 10 billion won before recently being caught by financial authorities. Furthermore, suspicions of over a thousand illegal accounts being opened have emerged at DGB Daegu Bank, prompting the FSS to initiate on-site investigations.

Previously, Lotte Card saw Korea Retail Card Holdings become its largest shareholder by the company acquiring a 60 percent stake in 2019. Korea Retail Card Holdings, which currently owns 59.83 percent of Lotte Card, is a special purpose corporation of MBK Partners, a South Korean private equity firm. Woori Bank and the existing parent company, Lotte Shopping, are the remaining two owners, as each hold 20 percent.