[LOTTE CRISIS] Lotte Chemical suspected of stashing slush funds

By Ahn Sung-mi

Published : June 16, 2016 - 18:03

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[THE INVESTOR] Prosecutors suspect Lotte Group’s affiliate Lotte Chemical is behind stashing multibillion won slush funds abroad amid a widening probe into Korea’s fifth largest conglomerates over embezzlement.

According to local reports on June 16, Lotte Chemical has reportedly amassed funds by overstating the import price of raw materials and later siphoned off to the group’s executives.

Lotte Department Store in central Seoul. The Investor

In this process, Lotte Chemical stuck a deal with Lotte Corporation Japan, one of its affiliates, to purchase raw materials including mixed xylene from petrochemical supplies.

Lotte Chemical, however, said they have stopped trading through Lotte Corporation Japan since 2013, in a statement on June 15.

Prosecutors are also considering to seek cooperation from their Japanese counterparts to secure evidence to prove Japanese affiliates’ involvement in the slush fund creation, officials with the prosecution were cited as saying.

By Ahn Sung-mi (sahn@heraldcorp.com)

Ahn Sung-mi
sahn@heraldcorp.com
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[LOTTE CRISIS] Lotte Chemical suspected of stashing slush funds

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