SOUTH KOREA. Lotte Duty Free has strongly rejected any allegations of impropriety following today’s raids by investigators on the offices of Lotte Group.
As reported, both Lotte and SK Group – widely considered to be the front-runners for new Seoul downtown duty free licences due to be awarded next month – were visited by investigators examining the escalating political furore surrounding Choi Soon-sil, confidante to President Park Geun-hye.
Prosecutors indicted Choi and a former presidential aide at the weekend on charges of colluding with President Park to pressure Korean businesses to make donations to the Mir and K-Sports foundations. They also announced that the President will be investigated “as a suspect”, though the law gives her immunity from prosecution. Park is the first South Korean President to face a criminal investigation while in office.
Today’s raids are reportedly linked to investigators’ concerns that the two businesses funded the foundations in their efforts to win back licences lost in the 2015 round of bidding.
But Lotte Duty Free has lambasted that suggestion and also scotched newspaper reports of “rumours” that “high-ranking officials” from Lotte had met with then-finance minister Choi Kyung-hwan regarding the Lotte World Tower duty free licence (Choi categorically denied these allegations through a statement today).
“The decision to donate the money was made at the end of October. And then we lost our licence for the World Tower store in November. It is not reasonable therefore to think that the donation was a background deal for securing the [subsequent] licence.” – Lotte Duty Free
Speaking for the first time since the incident, the travel retailer told The Moodie Davitt Report: “Of course we have to wait until the result of the prosecutor’s inspection comes out. However, we did not have any contact or deal with Mr Choi, the congressman, regarding the licence as he announced publicly today.
“We donated the money to the Mir Foundation because we thought there was a match between Mir and us since both aimed to promote ‘Hallyu’ [Korean culture marketing -Ed].
“It does not make any sense to say that there was a deal regarding the [new duty free] licence since the decision to donate the money was made at the end of October. And then we lost our licence for the World Tower store in November. It is not reasonable therefore to think that the donation was a background deal for securing the [subsequent] licence.”
Asked how concerned Lotte is that the political scandal might influence or delay the duty free licensing announcement, the company replied: “We think that it harms the consistency of national policy if such a scandal influences the schedule.
“The government’s decision [to issue new licences] was made through a justifiable procedure because there has been an increment of foreign tourists (mainly Chinese). This led to the need to add more duty free operators, while the side-effects of depriving previous licences were obvious.
“The scandal does not have anything to do with those factors.”
In a hard-hitting statement today Choi Kyung-hwan noted that Korea Customs Service has the inherent right to approve the new licences. He promised severe legal reaction if media or politicians suggested any conspiracy involving him and the licensing issue.
Footnote: Lotte Duty Free CEO Jang Sun-wook gave his first interview to the international media in a compelling discussion with Martin Moodie in Seoul earlier this month. Click here to read.
