[LOTTE CRISIS] FTC files petition against Lotte Group founder

[THE INVESTOR] South Korea’s antitrust watchdog said on Sept. 21 that it has filed a petition against Lotte Group founder Shin Kyuk-ho for falsely reporting the owner family’s shareholding in overseas affiliates.

The Fair Trade Commission decided to take legal punitive step after a months-long review of the case that dates back to 2012-2015 when the Lotte patriarch served as chairman of the retail giant.

Under the current fair trade law, companies with assets exceeding 5 trillion won (US$4.48 billion) are obligated to disclose stakes held by the company’s head and the owner family members in affiliates both at home and abroad. 

The FTC said 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 companies, the FTC said.

“Shin had received warnings from the FTC for the same accusations several times in 2005, 2011 and 2012, but he repeated the 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.

Meanwhile, prosecutors are widening investigations into Shin’s second son and incumbent Chairman Shin Dong-bin on charges of alleged embezzlement and breach of trust.

By Lee Ji-yoon (jylee@heraldcorp.com)