[THE INVESTOR] The expanding probe into alleged irregularities at Lotte Group is leading investigators to the multibillion-dollar real estate empire under the control of its founding family, and also implicating Lotte companies.
Lotte Group founder Shin Kyuk-ho has made a name for himself as one who has the Midas touch when it comes to real estate transactions, managing to turn profits with most -- if not all -- transactions.
Investigators enter Lotte Group premises on June 10. The Investor
However, speculations and evidence suggesting that Shin illegally mobilized Lotte companies’ funds in his transactions have emerged since the June 10 raid on Lotte firms and locations linked to Shin and his younger son
Shin Dong-bin.
According to chaebul.com, a website specializing in information concerning family-run conglomerates, Lotte companies have bought 11 properties owned by Shin since 2000.
The properties, with a combined area of about 1,876 hectares, saw 65.1 billion won ($55.5 million) of Lotte firms’ funds in Shin’s hands.
Aside from deals between Shin and Lotte firms, a transaction involving
Lotte Shopping and Lotte Scholarship Foundation is also drawing attention.
On Oct. 17, 2007, Shin donated a 100 hectare piece of land in Osan, Gyeonggi Province, to Lotte Scholarship Foundation after having held onto it since 1973.
A day after the donation, Lotte Shopping’s board of directors approved plans to purchase the land from the foundation at 70 billion won. Lotte Shopping and the foundation signed the deal on Nov. 9 of that year. However, on Dec. 17, Lotte Shopping’s board of directors approved raising the price to 103 billion won, pushing it up by more than 30 billion won in the span of five weeks.
By Choi He-suk (cheesuk@heraldcorp.com)
