Lotte brothers prepare for showdown in Japan amid probe

[THE INVESTOR] Amid the widening investigation into Lotte Group, a fresh round of fraternal conflict between Lotte chairman Shin Dong-bin and his brother Shin Dong-joo is expected to take place on June 25 at a shareholders’ meeting of the Tokyo-based Lotte Holdings that controls Hotel Lotte, the de facto holding company of its Korea operations. Shin Dong-joo is expected to propose a motion to oust his brother and incumbent chairman Dong-bin who controls Lotte’s Korea and Japan operations. Shin D

June 19, 2016

More consumers reaching for affordable wines

[THE INVESTOR] Wine has found a new place in the lifestyles of Korean consumers who increasingly see it as a casual drink for everyday enjoyment due to falling prices and growing accessibility.According to the Korea International Trade Association, wine imports last year reached $189.8 million, surpassing the value of imported whisky for the first time. New trends indicate that much of the growth was fueled by Korean consumers’ increasing preference for affordable wines to enjoy at home. The vol

June 19, 2016

[LOTTE CRISIS] Five major allegations against Lotte

[THE INVESTOR] Prosecutors are focusing on five main allegations against Lotte Group in their probe on the nation’s fifth largest conglomerate. 1. Shin Kyuk-ho and Shin Dong-bin’s 30 billion won (US$25.6 million)Prosecutors on June 16 secured testimony that Lotte group founder Shin Kyuk-ho and his son -- current group chairman Shin Dong-bin -- had collected 10 billion won and 20 billion won, respectively, from the affiliates under the conglomerate. The two Shins asserted that the amount was for

June 19, 2016

Lotte founder moves hospital amid escalating probe

[THE INVESTOR] Lotte Group founder Shin Kyuk-ho was transferred to another hospitals on June 18 amid prosecutors’ escalating probe into the retail and food giant. According to news reports, the 93-year-old was admitted to Asan Medical Center earlier in the day from Seoul National University Hospital where he had been hospitalized since Jun 9 due to high fever. Lotte Group founder Shin Kyuk-hoAn official close to his eldest son Shin Dong-joo was quoted as saying that there was medical opinion tha

June 19, 2016

Lotte suspected of giving favors to founder’s third wife

[THE INVESTOR] Lotte Group is suspected of giving business favors to a company controlled by its founder’s third wife Seo Mi-kyung, industry watchers said on June 17.Seo is among those being investigated for their involvement in the retail giant’s slush fund allegations. The 57-year-old Seo is the 1977 winner of the group’s Miss Lotte beauty pageant and has a 33-year-old daughter with Lotte founder Shin Kyuk-ho, now 93. Seo came into the limelight recently as prosecutors have widened their probe

June 17, 2016

Cuckoo purifiers’ toxic substance at permitted levels

[THE INVESTOR] Cuckoo Electronics on June 16 said the filters of its purifiers were safe to use after reports showed them using a toxic substance called octylisothiazolinone.Cuckoo said it used one-tenth of government permitted levels to strengthen the filters against viruses and bacteria.However, Cuckoo said it would replace the filters with those that did not use the substance, free of charge, to those who would like a replacement. Cuckoo‘s comments come amid a nationwide uproar over toxic hum

June 16, 2016

[LOTTE CRISIS] Lotte Chemical suspected of stashing slush funds

[THE INVESTOR] Prosecutors suspect Lotte Group’s affiliate Lotte Chemical is behind stashing multibillion won slush funds abroad amid a widening probe into Korea’s fifth largest conglomerates over embezzlement. According to local reports on June 16, Lotte Chemical has reportedly amassed funds by overstating the import price of raw materials and later siphoned off to the group’s executives. Lotte Department Store in central Seoul. The InvestorIn this process, Lotte Chemical stuck a deal with Lott

June 16, 2016

[LOTTE CRISIS] Lotte Japan likely to face probe

[THE INVESTOR] South Korean prosecutors may seek a joint probe with investigators in Japan to expand its investigation into Lotte’s alleged creation of slush funds and embezzlement, according to reports Thursday quoting officials with the prosecution.Lotte’s subsidiaries in Japan are running relatively smaller businesses than the group’s operations in Korea. But when looking at its corporate governance structure, most of Lotte’s affiliates in Korea are being controlled by Tokyo-based Lotte Holdi

June 16, 2016

[EXCLUSIVE] Lotte drops DFA bid amid widening probe

[THE INVESTOR] Lotte Group has given up its plans to acquire Duty Free Americas Inc., the largest duty-free operator in the U.S., amid the widening probe that had earlier forced the South Korean retail giant to withdraw plans to list its hotel unit, The Korea Herald found Thursday.“The group has effectively given up on the potential acquisition of a U.S. duty-free operator worth 1.7 trillion won ($1.5 billion), now that the initial public offering of its hotel unit has been indefinitely delayed

June 16, 2016

[LOTTE CRISIS] Who is Hwang Gak-kyu?

[INVESTOR] Hwang Gak-kyu, a close aide to Lotte Group chairman Shin Dong-bin, is under the spotlight amid the widening probe by prosecutors into Korea’s retail giant over alleged creation of slush funds and embezzlement. Hwang is the president in charge of policy coordination of the group, which is regarded as the control tower of the retail giant. The team is responsible for various mergers and acquisition deals of the conglomerate and was also in charge of constructing Seoul’s 123-story skyscr

June 15, 2016

[LOTTE CRISIS] Shin Dong-bin’s right-hand man suspected of stashing slush funds

[THE INVESTOR] Prosecutors believe Hwang Gak-kyu, a close aide to Lotte chairman Shin Dong-bin, is a key figure behind Lotte Group’s massive slush fund creation, local news reported on June 15. Hwang, who is the head of the operation team and president of the group, is reportedly suspected to have transferred slush funds by overstating the import price of raw materials. Lee Sang-sub/babtong@heraldcorp.comSeoul Central Prosecutor’s Office has secured testimony and evidence that Hwang, a petrochem

June 15, 2016

E-Land, KKR sign binding MOU on Kim’s Club sale

[THE INVESTOR] Local retailer E-Land on June 15 signed a binding memorandum of understanding with the U.S. private equity fund KKR & Co. regarding the sale of hypermarket chain Kim’s Club. E-Land told local media that the memorandum is based on details worked out during previous negotiations and that the two sides are continuing negotiations. The two firms are expected to hammer out details over the next month.According to reports, E-Land and KKR have negotiated over the latter’s acquisition of

June 15, 2016

[LOTTE CRISIS] Tax-haven firms with ‘Lotte’ name raise questions

[THE INVESTOR] Some offshore companies may have possible links to the embattled Lotte Group, which is facing a widening probe over alleged embezzlement and slush fund creation. Lotte Group Limited and Lotte Farm Group Limited, which were incorporated in the tax haven British Virgin Islands in 2012 and 2011, respectively, are listed in the Panama Papers -- which features millions of leaked documents on offshore companies and their ultimate beneficiaries -- reviewed by The Investor on June 15. The

June 15, 2016

[LOTTE CRISIS] Lotte chairman vows to list Hotel Lotte by year-end

 [THE INVESTOR] Lotte Group chairman Shin Dong-bin on June 14 (U.S. time) pledged to push through with the now-stalled plans for Hotel Lotte’s initial public offering by the end of this year.“This does not indicate an indefinite delay,” Shin told reporters at the groundbreaking ceremony for a joint venture chemical plant in Lake Charles, U.S. “This was a promise made to the public, and it will be followed through.  Lotte Group chairman Shin Dong-binOn June 10, local prosecutors launched an inves

June 15, 2016

Shin Dong-joo eyes return to power

[THE INVESTOR] The bitter family feud that broke out between two brothers of one of Korea’s largest conglomerates is reigniting as a probe into the group’s finances threatens to shake the company’s stability.Shin Dong-joo, the head of SDJ Corporation, was ousted by shareholders from his controlling position in Lotte’s Japanese operations under the leadership of his younger brother Shin Dong-bin earlier this year.By removing Lotte founder Shin Kyuk-ho and Shin Dong-joo from power, Shin Dong-bin e

June 14, 2016

[LOTTE CRISIS] Breakdown of Lotte Group’s mega real-estate empire

[THE INVESTOR] The widening probe into Lotte Group over alleged embezzlement and the creation of a slush fund is shedding light on the South Korean retail giant’s vast real estate, the scale of which is thought to be the largest among conglomerates here if both listed and unlisted units are combined. The value of property owned by Lotte’s eight listed units is estimated to be 10.7 trillion won ($9.08 billion) as of 2015, the third largest in the nation, following Hyundai Motor Group with propert

June 14, 2016

[LOTTE CRISIS] 15 more Lotte affiliates raided in widening probe

[THE INVESTOR] Seoul prosecutors executed a second round of raids on several key affiliates of South Korean retail giant Lotte Group on Tuesday in a widening probe into the country’s fifth-largest conglomerate over alleged embezzlement and slush fund creation.The Seoul Central District Prosecutor’s Office said it raided 15 offices, including Lotte Chemical, Lotte Confectionery, Lotte Chilsung Beverage and Lotte Engineering & Construction, an unlisted company. Lotte Group’s headquarters in centra

June 14, 2016

[LOTTE CRISIS] Shin Kyuk-ho’s hidden cash, ledgers found

[THE INVESTOR] Prosecutors have found a breakthrough in their investigation of Lotte Group‘s founder and top executive, securing testimony that two officials had received more than 30 billion won ($25.6 million) annually from companies affiliated with the conglomerate.Financial managers within the group reportedly told prosecutors during questioning that Lotte founder Shin Kyuk-ho and his son, current group chairman Shin Dong-bin, had collected 10 billion won and 20 billion won, respectively, ea

June 14, 2016

[LOTTE CRISIS] Lotte crisis becomes boon for Axiall shareholders

[THE INVESTOR] Shareholders of Axiall have inadvertently benefited from the current crisis faced by South Korean retail giant Lotte, which resulted in Lotte Chemical dropping out of the race to acquire the U.S.-based chemicals firm. Lotte Chemical and U.S. chemicals manufacturer Westlake Chemicals had previously been vying with one another to acquire Axiall. In the face of competition from Lotte, Westlake had raised the stakes. On June 10, the company won the bid for Axiall after submitting a bi

June 14, 2016

[LOTTE CRISIS] Probe questions Lotte’s $10b real estate empire

[THE INVESTOR] The expanding probe into alleged irregularities at Lotte Group is leading investigators to the multibillion-dollar real estate empire under the control of its founding family, and also implicating Lotte companies. Lotte Group founder Shin Kyuk-ho has made a name for himself as one who has the Midas touch when it comes to real estate transactions, managing to turn profits with most -- if not all -- transactions. Investigators enter Lotte Group premises on June 10. The InvestorHowev

June 14, 2016