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Published on : Friday, June 10, 2016
The office of South Korea’s fifth-largest hotel group Lotte was raided by the prosecutors on 9th June’16. The incident brought a blow to the hotel unit’s planned IPO, which is billed as the biggest in the world.
17 locations, including the headquarters of Lotte group in central Seoul, the home of the Chairman and other executives, were searched by almost 200 investigators as a bribery investigation into a director was launched by the prosecutors.
The family-run conglomerate, which dominates the fourth largest economy of Asia, was rocked by the feud on 2015.
A Lotte official informed that the raid on Friday 9th June was not expected. Hotel Lotte, Lotte Home Shopping and Lotte Department Store confirmed about the raid. But none of the employees wanted to be identified due to the sensitivity of the incident. Three of the employees with direct knowledge of the main matter, informed that these raids were a part of an ongoing investigation into a possible slush fund. It was also found out that the prosecutors were looking into a breach of trust regarding asset transactions.
Both the Seoul Central Prosecutors’ Office and the Lotte Group declined to comment on this matter.
Park Ju-gun of a corporate analysis firm CEO Score informed, “Lotte will likely delay the IPO a bit further and wait for the public outcry to die down a bit. Shin Dong-bin needs to do the IPO because of not only his promise last year but also because Lotte Group continues to expand and needs to raise money from the outside.”
Shin Dong-bin is the younger son of the founder of Lotte Group, who heads the group over his elder brother.