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[LOTTE CRISIS] Lotte accused of using real estate to create slush funds
By Korea HeraldPublished : June 14, 2016 - 15:04
[THE INVESTOR] Prosecutors are investigating allegations that Lotte Group chairman Shin Kyuk-ho, 94, used real estate transactions to accumulate slush funds.
The authorities say that Shin purchased cheap real estate and sold them off to other affiliates at a much higher price. They are searching for evidence linking the proceeds from such sales to corporate slush funds.
According to the industry, Shin resold land that he had granted to a Lotte scholarship foundation for 103 billion won ($87 million) to Lotte Shopping in 2007. The sale occurred less than a month after the land was granted.
The investigation into Shin’s real estate assets is part of an unprecedented probe into Lotte launched by the prosecution this month.
On June 10, South Korean prosecutors conducted a mass raid of 17 Lotte-related affiliates.
Four days later, the probe was expanded to include 15 more affiliates including Lotte Chemical and Lotte Engineering & Construction on allegations that they were a part of an embezzlement scheme believed to be masterminded by the Lotte founding family, including Shin Kyuk-ho and his sons Shin Dong-bin and Shin Dong-ju.
Authorities say there is a string of similar transactions.
Among them, in 1974, Shin purchased land in Incheon to build a golf course. He sold it to Lotte International in 2008 for 50.4 billion won, which is said to be twice its market value.
Shin also sold land he bought from 1973-1974 for 10 billion won to Lotte Confectionery and Lotte Chilsung Beverage.
By Kim Ji-hyun (jemmie@heraldcorp.com)
The authorities say that Shin purchased cheap real estate and sold them off to other affiliates at a much higher price. They are searching for evidence linking the proceeds from such sales to corporate slush funds.
According to the industry, Shin resold land that he had granted to a Lotte scholarship foundation for 103 billion won ($87 million) to Lotte Shopping in 2007. The sale occurred less than a month after the land was granted.
The investigation into Shin’s real estate assets is part of an unprecedented probe into Lotte launched by the prosecution this month.
On June 10, South Korean prosecutors conducted a mass raid of 17 Lotte-related affiliates.
Four days later, the probe was expanded to include 15 more affiliates including Lotte Chemical and Lotte Engineering & Construction on allegations that they were a part of an embezzlement scheme believed to be masterminded by the Lotte founding family, including Shin Kyuk-ho and his sons Shin Dong-bin and Shin Dong-ju.
Authorities say there is a string of similar transactions.
Among them, in 1974, Shin purchased land in Incheon to build a golf course. He sold it to Lotte International in 2008 for 50.4 billion won, which is said to be twice its market value.
Shin also sold land he bought from 1973-1974 for 10 billion won to Lotte Confectionery and Lotte Chilsung Beverage.
By Kim Ji-hyun (jemmie@heraldcorp.com)
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Articles by Korea Herald
