The year 2016 had been set to become a major turning point for Lotte chairmanShin Dong-bin to build up a “Global Lotte.”
From the much-anticipated initial public offering of its hotel unit to a flurry of new mergers and acquisitions to be set in motion, the country’s fifth-largest conglomerate had been on track to fulfill its ambition to expand its business empire beyond its domestic boundaries.
Yet, all came tumbling down on June 10.
Seoul prosecutors kicked off a record-scale probe into the country’s fifth-largest conglomerate and its major affiliates over allegations of embezzlement and the creation of a multibillion won slush fund.
The Seoul Central District Prosecutors’ Office has executed two rounds of raids on Lotte’s headquarters and major affiliates including Hotel Lotte and Lotte Chemical, the group’s two main pillars, and sending the group into its biggest crisis to date.
The probes have dealt a major blow to Lotte’s core agenda for the year.
The retail giant pushed for public listing of its hotel unit, valued at up to $4.5 billion, touted as the largest IPO in the world this year. Lotte has also been stepping up efforts to become a global corporation through the strategic acquisition of foreign companies.
The investigation has already pushed Lotte Chemical, suspected as a key Lotte unit having engaged in the creation of a slush fund, to abruptly withdraw its bid to acquire U.S. chemicals producer Axiall Corp., now under the wing of U.S. rival Westlake Chemicals Corp.
“Given the ongoing investigation, Lotte will not be able to partake in M&A talks with companies abroad or push forward its global expansionist agenda as it did before the start of the investigation,” a Lotte Group spokesperson told The Korea Herald.
(Source: Korea Herald )