Lotte Group appears to have become the latest target in a widening prosecution probe against the country’s major conglomerates, with investigators reportedly searching the financial accounts of the retail giant for alleged slush funds.

The probe comes after the Korea Financial Intelligence Unit, an arm of the Financial Services Commission, filed a complaint with the prosecutors’ office for suspicious funds flowing out of the retail unit Lotte Shopping in 2014.

The company dismissed the allegation on Thursday.

The prosecution has already interrogated five executives and employees of Lotte Shopping via summons earlier this year, reports said.

In a statement on Thursday, Lotte argued that the funds were legitimately used as subsidies for employees’ activities such as spending one interviewing job seekers, dining and transportation.

It added that there was no cash flow between Lotte Shopping’s four major business arms, including the department stores, discount chains, movie theaters and supermarkets.

But financial regulators are reportedly zeroing in on how some Lotte Shopping affiliates took out some 1 billion won in cash between 2011 and 2012 during the former Lee Myung-bak administration.

The retail giant’s parent Lotte Group has been regarded as one of the few core beneficiaries of the Lee government. The conglomerate attained state approval for the controversial 123-level Lotte World Mall in southern Seoul during Lee’s term.

The case has been taken on by the Seoul Central District Prosecutors’ Office, which is also in charge of the probe into slush fund speculation of Shinsegae Group, a retail business competitor of Lotte.

On Thursday, Justice Minister Hwang Kyo-ahn was quoted in news reports as saying that the authority “would make public any (irregular business practices in the conglomerate sector) through thorough investigation as long as (we) secure evidence and confirm their crime.”

Hwang made it clear that the prosecution is investigating “not the overall enterprises but those engaged in corruption” and that the probe would not be conducted in an unfair manner.

The minister also denied the prosecution was eventually aiming for former President Lee and his associates, saying, “I don’t know what pro-Lee is. The investigations are strictly over irregularities without any political consideration.”

By Kim Yon-se (kys@heraldcorp.com)