[Yonhap News Photo]
South Korea's Lotte Group has put the brake on a crucial deal roadshow aimed at attracting foreign investors in connection with the listing of the group's hotel and duty-free operating unit due to an unexpected bribery scandal.
Lotte officials said the planned road show in Hongkong this week has been delayed because of an investigation by state prosecutors.
An IR conference for the initial public offering (IPO) of Hotel Lotte on June 29 has been led by group chairman Shin Dong-bin who said Lotte would be reborn to become "a reliable entity with transparent corporate governance". Market estimates on the offering ranged from 4.6 trillion (3.8 billion US dollars) to 5.7 trillion won.
The group has sought to refresh its image tainted by a family feud through a series of roadshows in New York, London, Singapore and Hong Kong.
Hotel Lotte has promised to expand its duty-free and other businesses. Last week, however, prosecutors raided its duty-free business department and the house of Shin Young-ja, the daughter of group founder Shin Kyuk-ho. She is suspected of taking kickbacks related to duty-free shops.
Lotte, South Korea's fifth largest family-run conglomerate, has been engulfed in a protracted fraternal feud as its ailing founder, Shin Kyuk-ho, 94, was in his dotage without making a clear decision on his successor. His younger son, Shin Dong-bin, now holds the support of South Korean and Japanese shareholders, but his elder brother, Shin Dong-joo, has refused to give up his bid for managerial control of the retail and hotel giant.
The feud began in late 2014 when Dong-bin seized control of Lotte Holdings, the group's Tokyo-based holding company, in a bid to succeed his father.
In July last year, the ailing father fired his younger son, but Dong-bin fought back by sacking his father, insisting his father cannot name an heir because he has been mentally incompetent with age. Since then, the two sons have continued to challenge each other's claims to the empire.
Under the command of Dong-bin, Lotte Shopping, the group's key unit, posted a 22 percent on-year drop in its first-quarter operating profit due to weaker operating performance in its hypermarket and home shopping businesses.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
