[THE INVESTOR] The prosecution investigating the Lotte Group corruption case filed for an arrest warrant for Lotte Homeshopping CEO Kang Hyun-gu on July 14. Kang is the first CEO of a Lotte Group company to face arrest in the ongoing case.

Kang is suspected of destruction of evidence, violating the Broadcasting Act, and embezzlement and breach of trust under the Act on Aggravated Punishment, etc. of Specific Economic Crimes.

According to the prosecution, Kang provided false information in applying for renewal of broadcasting license. Kang is also suspected of setting up a 900 million won (US$793,000) slush fund, and causing 8 billion won damages to the company during Lotte PS Net’s capital increase. Lotte PS Net is a provider of automated teller machines and accounting automation systems.

The prosecution has also been attempting to determine whether Lotte Homeshopping bribed Ministry of Science, ICT and Future Planning officials in the relicensing process.

By Choi He-suk (cheesuk@heraldcorp.com)