April 19, 2024

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[THE INVESTOR] South Korean prosecutors on Nov. 24 raided the offices of Lotte Group and SK Group over allegations they lobbied President Park Geun-hye and her close friend Choi Soon-sil to secure their duty-free store license last year.

The prosecution team investigating the snowballing presidential scandal said it raided 10 places, including Lotte’s corporate headquarters in central Seoul, and SK SUPEX Council, the group’s de facto control tower, in the morning. 

Prosecutors are looking into whether the two groups had donated large sums of money to two nonprofit foundations operated by Choi in return for business favors.

SK donated a combined 11.1 billion won (US$9.37 million) -- 6.8 billion won by SK hynix, 2.15 billion won by SK Chemicals and 2.15 billion won of SK Telecom -- to the foundations, while Lotte offered 4.9 billion won, including 2.8 billion won by Hotel Lotte and 1.7 billion won by Lotte Chemical.

The two groups were also said to have considered additional funding early this year right after their heads -- SK Group Chairman Chey Tae-won and Lotte Group Chairman Shin Dong-bin -- held separate meetings with President Park.

The investigation comes just before the Korea Customers Service picks four new operators of duty-free shops in Seoul next month. Retail giants and other big firms, including Lotte and SK, are vying to secure the lucrative business license.

By Lee Ji-yoon (jylee@heraldcorp.com)