S. Korean prosecutors raid Lotte Group offices for slush fund charges

South Korean prosecutors on Friday raided Lotte Group offices and the houses of some executives on suspicions that slush fund was created in the course of trading assets between affiliates, Yonhap news agency reported.

About 200 prosecutors and investigators were sent to a total of 17 places, including the group's headquarters in central Seoul, the offices of seven affiliates and the houses of some executives.

Computer hard disk, accounting books and documents on asset transactions were confiscated during the search, according to the report.

In addition to the ongoing family feud between group chairman Shin Dong-bin and his elder brother Shin Dong-joo over the group's management control, the investigation on slush fund is expected to worsen the group's image and brand further.

Lotte is country's fifth-largest family-run conglomerate, operating businesses both in South Korea and Japan. The group's business fields range from hotels and amusement parks to department stores, discount outlets, construction and chemicals.

An official at the prosecution office was quoted as saying that the search and seizure was conducted on charges of the group's creating slush funds when trading assets between affiliates that he called a case of embezzlement and breach of duty by major executives.

Prosecutors had reportedly trailed bank accounts of the group's affiliates, including Hotel Lotte, Lotte Department Store, Lotte Shopping and Lotte Mart, for the past several months to find the suspected illegal transactions of funds between affiliates. Endit