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Online site reveals Korean Lotte's dividend payouts to Japan

All News 13:47 June 13, 2016

SEOUL, June 13 (Yonhap) -- Lotte Group affiliates in South Korea paid more than 180 billion won (US$154 million) in dividends to their Japan-based sister companies over five years through 2015, a local corporate survey company said Monday.

According to a report by Chaebul.com, an online business information provider, Lotte Holdings and other Lotte affiliates in Japan received a total of 183.24 billion won in dividend payouts from 2011 to 2015. Lotte Holdings is the de facto holding company for the retail-to-petrochemical conglomerate's far-flung operations in Korea and Japan.

"During the five-year period, Hotel Lotte sent 120.4 billion won, or 7.5 percent, of its consolidated operating profit worth 1.6 trillion won, to Lotte companies in Japan that have a stake in the hotel. The remaining 60 billion won was delivered by other Lotte firms in Korea to Lotte companies in Japan that own a stake in them," a Chabul.com official said.

If Hotel Lotte succeeds in its planned initial public offering (IPO) worth up to $4.5 billion, its shareholding Lotte companies in Japan will be able to raise hefty funds by selling the hotel stocks they own, Chabul.com said.

But the hotel unit's planned IPO, the world's biggest so far this year, is widely expected to suffer delays from the deadline of July 27, as prosecutors last week began a probe into the formation of a possible slush fund in Hotel Lotte and other Lotte companies.

Under the country's stock exchange rules, a company has to list its shares within six months after the financial regulator gives preliminary approval for its IPO plan.

On Sunday, the Lotte Group said in a statement it will be "physically difficult" for Hotel Lotte to meet the IPO deadline as distraction by the investigation will make it hard for the hotel unit to focus on additional steps to list its shares.

The investigation is the latest blow to the country's fifth-largest conglomerate by assets which is still reeling from a feud that tore its founding family apart in recent years.

The group founder Shin Kyuk-ho's two sons -- Dong-joo and Dong-bin -- have been in a battle over control of the retail giant that has 93 affiliates in Korea, 36 more in Japan and more than 100 trillion won in assets.


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