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Lotte's fast food unit undergoes tax probe

South Korea's tax authorities have conducted a monthlong tax probe into the fast food chain arm of Lotte Group, which is embroiled in a family feud over control of the sprawling retail giant, sources said Wednesday.

Investigators from the National Tax Service inspected the main office of Lotteria in Seoul between July 7 and Aug. 11, according to the sources.

It is the first tax probe into Lotteria since 2011 and comes after the service carried out an audit into Daehong Communications, the advertising arm of Lotte.

Lotte Group has been rocked by the family struggle involving founder Shin Kyuk-ho and his two sons -- Dong-joo and Dong-bin. The second son, Dong-bin, recently tightened his grip on power after winning support from shareholders of a holding company in Japan.

The sometimes nasty infighting has caused public sentiment to turn sour against family-run conglomerates in South Korea, known as chaebol, and sparked a boycott of Lotte goods and services.   

Insiders said the results of the investigation have not been sent to Lotteria.

The latest tax probe is not related to the group's power struggle, Lotteria said, adding that it was a regular audit conducted on companies about every five years.

"It has nothing to do with the family feud," a Lotte official stressed.

Lotteria's largest shareholder is Lotte Shopping that owns 38.68 percent of the fast food chain, followed by Hotel Lotte with 18.77 percent. (Yonhap)