South Korea's antitrust watchdog said Wednesday that it will file a petition against the founder of retail giant Lotte Group with state prosecutors for falsely reporting its overseas affiliates' shareholding.
The Fair Trade Commission made the final decision to take the legal punitive step after a months-long review of the case that dates back to when Shin Kyuk-ho was in control of South Korea's fifth-largest conglomerate.
Under South Korea's fair trade law, companies with assets exceeding 5 trillion won ($4.48 billion) are obligated to disclose stakes held by the company's head and his or her family members in affiliates at home and abroad.
Prosecutors were already widening investigations into prominent members of the Shin family, including the founder's second son and Lotte Group Chairman Shin Dong-bin, on charges of embezzlement and breach of trust.
From 2012-2015, Shin is alleged to have deliberately omitted four affiliates from relevant documents submitted to the watchdog and scaled down his family's stake in Lotte Group, according to the FTC.
"Shin had received warnings from the FTC for the same accusations several times in 2005, 2011 and 2012, but he repeated such violations," the FTC said in a statement. "The FTC will exercise strict control over such false reporting practices."
Earlier in May, the FTC also imposed a fine of 570 million won on 11 affiliates of Lotte Group for the falsified disclosure.
The ownership structure of Lotte, which has operations in food, confectionery, drinks, hotels and amusement parks, has been in the spotlight for nearly a year since the two sons of the founder engaged in a bitter feud to wrest control of the business group from their aging father last year.
The family feud caused state prosecutors to launch an investigation into a string of corruption allegations in which the group's top executives are involved. (Yonhap)
MOST POPULAR