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South Korea prosecutors raid more Lotte Group firms

South Korea’s Lotte Group said prosecutors were conducting additional raids on at least ten units including Lotte Chemical, heaping further pressure on the sprawling beer-to-petrochemicals conglomerate.

Lotte Chemical, Lotte Confectionery Co Ltd and unlisted Lotte Engineering and Construction were among the firms raided, a spokesman for the country’s fifth-largest conglomerate said.

A Lotte Chilsung Beverage Co Ltd spokesman also said the firm was being raided.

The new raids follow raids on Friday on the group’s headquarters as well as several of its companies including unlisted Hotel Lotte, which has since had to pull an initial public offering worth up $4.5 billion.

In addition to the derailment of an IPO billed as the world’s biggest this year, the aftermath of the raids has seen Lotte Chemical, the conglomerate’s biggest listed unit, bow out of bidding for U.S.-based Axiall Corp while share prices of group firms have tumbled.

The Lotte Group spokesman declined to comment on the reason for the raids.

People familiar with the matter have said the Friday raids, which involved about 200 prosecutors and investigators, were part of an investigation into a possible slush fund.

The Seoul Central Prosecutors’ Office could not be immediately reached for comment on Tuesday.

Shares in Lotte Group firms fell again on Tuesday, with Lotte Chemical having lost 6.1 percent and Lotte Confectionery down 9.3 percent since the first raids.

(Source: Reuters )

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