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Lotte World Tower (Photo = Lotte Corporation) |
[Alpha Biz= Kim Jisun] South Korea’s Fair Trade Commission (KFTC) has launched a formal investigation into allegations of unfair intra-group support within Lotte Group related to real estate transactions.
According to industry sources on Tuesday, the KFTC dispatched around ten investigators to the headquarters of Lotte Homeshopping, Lotte Corporation, and Lotte Wellfood to collect relevant documents. The investigation aims to determine whether Lotte Group's internal transactions were conducted under more favorable terms compared to external transactions, potentially distorting market competition. If such preferential dealings are confirmed, regulatory action may follow.
In July 2023, Lotte Homeshopping’s board approved the purchase of an office building in Yangpyeong-dong, Seoul, for ₩203.9 billion from Lotte Corporation and Lotte Wellfood. The company had previously been leasing the building but decided to acquire it, citing improved working conditions and cost savings.
However, Taekwang Industrial, Lotte Homeshopping’s second-largest shareholder, filed a complaint with the KFTC, claiming that the deal was overpriced and intended to provide financial support to the liquidity-strapped Lotte Group. Taekwang argued that the transaction was an unfair support scheme designed to stabilize Lotte’s group-wide financial structure, reinforcing the control of Lotte Corporation over its affiliates while potentially limiting market competition and increasing economic concentration.
A Lotte Group representative commented, "As this is still in the early stages of the investigation, we are currently assessing the situation."
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
