Lotte Group suspected of engaging in dubious transactions involving paper company

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• published: 21 Jun 2016
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롯데, 베트남서 페이퍼컴퍼니 이용 '수상한 투자' Moving on to the investigation into the country's fifth largest conglomerate. Seoul prosecutors are looking into whether Lotte Group's business units were involved in dubious transactions involving paper companies to create slush funds. Kim Min-ji reports. Lotte Group has been found to have engaged in suspicious transactions in Vietnam involving a paper company. In 2014, Lotte invested some 400 million U.S. dollars to establish Lotte Center Hanoi -- a 65-storey complex with a five-star hotel and apartments, a department store and offices. While the complex was being built,... Lotte Asset Development -- the group's property development arm -- bought a paper company named Coralis in Luxembourg for about 60 million dollars. The purchase gave the business unit the right to use and develop the land on which the complex was built. Later, Lotte Shopping and Hotel Lotte each bought 45 percent of the shares of the paper company -- leaving Lotte Asset Development with just 10 percent. The combined book value of the two units' shares is roughly 100 million. But last year, the paper company posted a net loss of about 50 million dollars -- and Lotte was criticized for going ahead with the business project while bearing the financial burden. Prosecutors are looking into whether Lotte Group used the special purpose company to inflate the losses... and whether it used the extra money to set up slush funds for the owner family. Lotte Group has brushed off allegations, saying that SPCs are set up to help the parent company comply with local regulations when it's involved in overseas investment and development projects. As the investigation progresses,... the fate of the founder's two sons will be determined at an upcoming shareholders' meeting this weekend. The shareholders of Lotte Holdings -- the group's de facto holding company based in Tokyo -- will meet on Saturday to vote on whether to dismiss Lotte chairman Shin Dong-bin. The meeting was requested by Shin Dong-joo, the eldest son and Lotte Holdings' former vice chairman. The younger Shin has long had shareholders' support, and they voted in favor of him at two previous meetings,... but with the investigation continuing,... all eyes are on the impact it will have on shareholders and whether they will change their minds. The elder Shin was stripped of his executive titles at three of Lotte's units early last year... and has since been struggling to claw his way back up to the top. Kim Min-ji, Arirang News. Visit ‘Arirang News’ Official Pages Facebook(NEWS): http://www.facebook.com/newsarirang Homepage: http://www.arirang.com Facebook: http://www.facebook.com/arirangtv Twitter: http://twitter.com/arirangworld Instagram: http://instagram.com/arirangworld