- FTC accuses group founder Shin Kyuk-ho of falsifying documents
- Regulator also fines 11 Lotte affiliates for filing violations
South Korea’s Fair Trade Commission said it’s asking prosecutors to investigate Lotte Group founder Shin Kyuk-ho for falsifying documents regarding his holdings and his family’s control over Lotte affiliates.
In an e-mailed statement, the regulator also said Wednesday that it fined 11 affiliates in South Korea 573 million won ($512,000) for falsely reporting that their overseas affiliates were “other shareholders” instead of “related companies” that have ties with the family. Lotte’s Shin family has control over South Korean entities through Japanese affiliates, and through a maze of cross shareholdings.
Lotte Group, in an e-mailed statement, said it cooperated with the investigation but disagreed with the FTC’s findings, including the classification of overseas affiliates. Lotte also said it’s contesting the fine in court.
An investigation into the founder Shin, 93, would add to the turmoil at one of South Korea’s well-known conglomerates, which has more than 90 units generating more than 100 trillion won in annual revenue.
Shin’s younger son and Lotte’s chairman Shin Dong-bin was questioned on Tuesday by prosecutors, who are investigating allegations of slush funds, embezzlement and tax evasion at the group. The summons came just a few weeks after the founder and his elder son, Shin Dong-joo, were also questioned by investigators who resumed their probe after the group’s vice chairman was found dead hours before he was scheduled to be questioned last month.