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Lotte founder's third wife owns large amount of property

All Headlines 11:46 August 30, 2016

SEOUL, Aug. 30 (Yonhap) -- The third wife of the embattled Lotte Group founder owns real estate worth tens of millions of dollars, data showed Tuesday, a revelation that comes as she faces a prosecution probe over suspected tax evasion.

Prosecutors are widening their probe into the country's fifth-largest conglomerate on suspicions of embezzlement, tax evasion and the creation of slush funds through dubious deals among affiliates and companies with links to the family of 93-year-old founder Shin Kyuk-ho.

According to data by Chaebul.com, which tracks large businesses in the country, Shin's common-law wife Seo Mi-kyung, 57, holds five pieces of real estate in her name located across the nation, which are worth 117.7 billion won (US$105 million) in terms of the government-set price.

Of the property, a 730,000-square-meter lot in Gimhae near the southeastern port city of Busan, which Shin gave Seo in 2007, boasts the high price of 82.2 billion won. Seo also owns 68.8 billion won worth of buildings in Seoul through Yuki Co. and Yuwon Industry Inc., which she jointly controls with her daughter.

Yuki and Yuwon, whose main business is real estate investment, are suspected of serving as conduits for Lotte Group's slush funds. The two firms are known to have reaped large profits through preferential deals with Lotte Department Store, Lotte Cinema and other major Lotte units. Yuki operates seven restaurants in Lotte Department stores.

Sources said prosecutors are investigating suspicions that the Lotte founder might have dodged taxes during the process of donating the assets to his wife.

Seo is the 1977 winner of the group's Miss Lotte beauty pageant and has a 33-year-old daughter with Shin. The two have a common-law marriage under South Korean law.

She faces a prosecution summons over suspicions that Shin dodged taxes in the process of donating a 6.2-percent stake in Lotte Holdings, held in borrowed names, to Seo, her daughter and Shin Young-ja, the Lotte Foundation chief and another daughter of the group founder, in 2006. Lotte Holdings is Lotte's de facto holding firm based in Tokyo,

The prosecution has been investigating Lotte Group since early June over alleged slush funds, embezzlement and other irregularities.

Lotte, which has sprawling businesses in both South Korea and Japan, has been gripped by a series of scandals since last year, including a bitter feud between Shin Dong-bin and his older brother for managerial control.

The prosecution probe hit a bump in the road on Friday as the group's vice chairman and close aide to Shin Dong-bin committed suicide on a trail in Yangpyeong, 55 kilometers east of Seoul.

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