Lotte Corporation#Controversies

Lotte was founded in June 1948, by Korean businessman Shin Kyuk-ho in Tokyo, Japan, two years after he graduated from Waseda Jitsugyo High School ({{lang|ja|早稲田実業学校}}). Originally called Lotte Co., Ltd, the company has grown from selling chewing gum to children in post-war Japan to becoming a major multinational corporation. {{Cite web |date=2020-04-11 |title=How Lotte went from making gum to a global leisure giant |url=https://www.scmp.com/lifestyle/food-drink/article/3078991/story-lotte-how-chewing-gum-maker-japan-became-one-south |access-date=2024-12-27 |website=South China Morning Post |language=en}}

The source of the company's name is German. Shin Kyuk-ho was impressed with Johann Wolfgang von Goethe's The Sorrows of Young Werther (1774) and named his newly founded company Lotte after the character Charlotte in the novel.{{cite web |title=Lotte Hotel Seoul – Hotel Facilities, Fitness, Spa, Conference room |url=http://www.lottehotel.com/seoul/en/facility/facility.asp?type=EX |access-date=19 August 2017 |website=www.lottehotel.com}}{{cite web |title=Korean Chaebols: Lotte. The Origin of the Lotte Name |url=http://www.knowledgeofasia.com/2012/11/02/korean-chaebols-lotte-the-origin-of-the-lotte-name/ |access-date=20 April 2014}} ("Charlotte" is also the name of premium auditoriums in movie theatres run by Lotte.{{cite web |date=13 September 2019 |title=Inside the Korean cinemas offering a red-carpet experience |url=https://www.scmp.com/magazines/style/leisure/article/3026895/inside-top-3-korean-cinemas-offering-film-goers-luxury-red}})

File:Lotte_Department_Main_Store.JPG

File:Villard_Houses_Mar_2021_08.jpg]]

Lotte Corporation – is located in Songpa-gu, Seoul and Lotte Holdings Co., Ltd. in Shinjuku, Tokyo. In 2013, as Shin Kyuk-ho, the founder of Lotte, faced declining health due to Alzheimer’s disease, a dispute arose between his two sons over the control of the conglomerate. Although Shin Kyuk-ho had designated his eldest son, Shin Dong-joo, as his successor, leadership was not transferred immediately. The conflict over ownership culminated with Shin Dong-bin emerging as the leader of Lotte.{{Cite web |date=2020-01-19 |title=Lotte's Shin Kyuk-ho built empire across nations |url=https://koreajoongangdaily.joins.com/2020/01/19/industry/Lottes-Shin-Kyukho-built-empire-across-nations/3072828.html |access-date=2024-12-28 |website=koreajoongangdaily.joins.com |language=en}}

On December 9, 2024, Appetite Equity Partners took over when it decided to buy a 56.2% stake in Lotte Rentals owned by Lotte Group.{{Cite web |date=2024-12-09 |title=롯데렌탈, 사모펀드에 인수된다…'렌터카 장악' 외자 기업 탄생할까 |url=https://www.sisaon.co.kr/news/articleView.html?idxno=166326 |access-date=2025-01-03 |website=시사오늘(시사ON) |language=ko}}

Lotte Group's major businesses are food, retail, chemical, construction, manufacturing, tourism, service, finance, etc.

• Food: Lotte Confectionery, Lotte Chilsung, Lotte Liquor, Lotte Asahi Liquor, Lotte GRS, and others.https://www.lotte.co.kr/global/en/business/main.do#none
• Retail/Entertainment: Lotte Department Store, Lotte Shopping, Lotte Hi-Mart, Lotte Cultureworks, Lotte Cinema, Lotte Super, Lotte On, Lotte Korea Seven, FRL Korea, and others.
• Chemical/construction/manufacturing: Lotte Construction, Lotte Chemical, Lotte Fine Chemical, Lotte MCC, Lotte E&C, Lotte Aluminium, Lotte Ineos Chemical, Korea Fujifilm, and others.
• Tourism/Service/Finance: Lotte Global Logistics, Lotte Rental, Lotte Resort, Lotte Duty Free, Lotte World, Lotte Property & Development, Lotte Capital, Lotte Hotels & Resorts, Daehong Communications, Lotte Hotel Busan, Lotte International, Lotte Innovate (Lotte Data Communication), and others

Lotte also owns professional baseball teams:

• Lotte Giants in Busan, South Korea (1982–present){{Cite web |title=LOTTE |url=https://www.lotte.co.kr/global/en/business/compDetail.do?compCd=L416#:~:text=About%20US&text=LOTTE%20Giants%20is%20a%20historic,Organization's%20inaugural%20year%20in%201982 |access-date=2024-06-12 |website=www.lotte.co.kr |language=en}}
• Chiba Lotte Marines in Chiba (city), Japan (1969–present){{Cite web |title=Zozo Marine Stadium {{!}} Travel Japan - Japan National Tourism Organization (Official Site) |url=https://www.japan.travel/en/spot/1555/ |access-date=2024-06-12 |website=Travel Japan |language=en-us}}

• Korea R&D Center : 201, Magokjungang-ro, Gangseo-gu, Seoul, South Korea

Lotte Corporation has received negative press attention due to treatment of a captive beluga whale named Bella, currently held in the Lotte World Aquarium Attraction in Seoul. In 2016, Lotte Corporation announced that they would no longer acquire new beluga whales after two of Bella's companions, Belli and Bellu, died in their care.{{cite web |last1=Jong-young |first1=Nam |title=After animal death, Lotteworld says it won't acquire more beluga whales |url=https://english.hani.co.kr/arti/english_edition/e_national/740380.html |website=The Hankyoreh |access-date=24 December 2023}} In 2019, Lotte Corporation pledged that they would release Bella from captivity.{{cite web |last1=Chen |first1=Heather |last2=Kwon |first2=Junhyup |title=This Beluga Whale Has Been Held in a Conglomerate's Aquarium for Years |url=https://www.vice.com/en/article/bella-beluga-whale-south-korea/ |website=Vice |access-date=24 December 2023 |language=en |date=1 October 2021}} As of 2023, the Lotte Corporation has come under increasing criticism for keeping Bella in solitary captivity for an extended multi-year period following their announcement.{{cite web |last1=Chen |first1=Heather |last2=Seo |first2=Yoonjung |title=Free Bella: The fight to release a beluga whale from a South Korean mega mall's aquarium |url=https://www.cnn.com/2023/12/23/travel/beluga-whale-bella-south-korea-intl-hnk/index.html |website=CNN |access-date=24 December 2023 |language=en |date=24 December 2023}} The corporation has also been criticized by civic groups for a lack of updates or cohesive plan for retiring Bella to a sanctuary.{{cite web |title=Civic groups call for release of last beluga whale from Lotte World Aquarium |url=https://www.koreatimes.co.kr/www/nation/2023/12/113_361792.html |website=The Korea Times |access-date=24 December 2023 |language=en |date=24 October 2023}}

In June 2016, the police conducted a probe into Lotte Corp for a possible slush fund and embezzlement.{{cite news |last1=Jin |first1=Hyunjoo |last2=Lee |first2=Se Young |date=August 26, 2016 |title=Lotte vice chairman found dead amid probe; suicide suspected |url=https://www.reuters.com/article/us-lottegroup-executive-idUSKCN11102Z |access-date=26 August 2016 |work=Reuters}} The Seoul Central District Prosecutor's Office reported that 240 investigators raided 17 Lotte offices, including its central Seoul headquarters and the homes of founder Shin Kyuk-ho, Chairman Shin Dong-bin and other key executives, with 15 more offices being raided just a week later.{{Cite web |last=Sohn |first=Ji-young |date=2016-06-14 |title=[LOTTE CRISIS] 15 more Lotte affiliates raided in widening probe |url=https://www.koreaherald.com/view.php?ud=20160614000948 |access-date=2024-01-18 |website=The Korea Herald |language=en}}

After news of the investigation broke, between June 10 and June 14, Lotte Group firms lost over {{KRWConvert|1.21|t|to=USD}} in market value.{{Cite web |last=Choi |first=He-suk |date=2016-06-14 |title=[LOTTE CRISIS] Lotte firms' market cap lose another 400 billion won |url=https://www.koreaherald.com/view.php?ud=20160614000894 |access-date=2024-01-18 |website=The Korea Herald |language=en}} By October, its value had fallen by 15.8% to {{KRWConvert|7.75|t|to=USD}} compared to its June 9 figure of {{KRWConvert|9.26|t|to=USD}}.{{Cite web |last=Sohn |first=Ji-youn |date=2016-10-19 |title=[LOTTE CRISIS] Prosecutors indict five Lotte family members |url=https://www.koreaherald.com/view.php?ud=20161019000964 |access-date=2024-01-18 |website=The Korea Herald |language=en}} Lotte Chemical Corp also withdrew from bidding for Axiall Corp in the wake of the scandal.

On 13 June 2016 Lotte announced it would withdraw its initial public offering (IPO) for Hotel Lotte, which was scheduled for the following month. The IPO was predicted to garner up to {{KRWConvert|5.2|t|to=USD}} which would have been the largest offering in South Korean history.{{Cite web |last=Eun-jung |first=Kim |date=2016-05-19 |title=Hotel Lotte IPO expected to become S. Korea's biggest offering |url=https://en.yna.co.kr/view/AEN20160519010000320 |access-date=2024-01-18 |website=Yonhap News Agency |language=en}} Lotte spokesperson Choi Min-ho told the Korean Herald, “we physically cannot meet next month’s deadline to complete the Hotel Lotte IPO given the current circumstances".{{Cite web |last=Kim |first=Youngwon |date=2016-06-13 |title=[LOTTE CRISIS] Hotel Lotte withdraws IPO as embezzlement probe deepens |url=https://www.koreaherald.com/view.php?ud=20160613000812 |access-date=2024-01-18 |website=The Korea Herald |language=en}} Despite local press reporting that Chairman Shin Dong-bin was keen to restart Hotel Lotte's IPO in 2020, Hotel Lotte is still yet to go public.{{Cite web |last=Son |first=Ji-hyoung |date=2020-05-04 |title=Lotte chief likely to push for Hotel Lotte IPO to win power struggle |url=https://www.koreaherald.com/view.php?ud=20200504000530 |access-date=2024-01-18 |website=The Korea Herald |language=en}}

In August 2016, Vice Chairman Lee In-won was found dead in his car with a four-page long suicide note.{{Cite news |date=2016-08-26 |title=Lotte vice chairman Lee In-won found dead |url=https://www.bbc.com/news/business-37192642 |access-date=2024-01-18 |work=BBC News |language=en-GB}} His death came just hours before he was due to be questioned by prosecutors.{{Cite web |last=Won |first=Ho-jung |date=2016-08-31 |title=Shin Dong-joo to be grilled in Lotte Group corruption probe |url=https://www.koreaherald.com/view.php?ud=20160831001061 |access-date=2024-01-19 |website=The Korea Herald |language=en}} Lee was considered the top lieutenant of Chairman Shin Dong-bin. According to a statement released by Lotte Group after his death, Lee "oversaw Lotte Group's overall housekeeping and core businesses and accurately understood the minds of Chairman-in-Chief Shin Kyuk-ho and Chairman Shin Dong-bin."

In October 2016, the Seoul Central District Prosecutors' Office closed their investigation. The probe had accused Lotte founder Shin Kyuk-ho, his mistress/common-law wife Seo Mi-kyung, his son Chairman Shin Dong-bin, and two other children of embezzling {{KRWConvert|146.2|b|to=USD}}. In addition, prosecutors claim family members committed inheritance tax fraud amounting to {{KRWConvert|115.6|b|to=USD}}. A further {{KRWConvert|22|b|to=USD}} of corporate tax was allegedly avoided by Lotte Chemical. South Korean authorities also argued that Lotte Engineering & Construction overpaid its suppliers and then reclaimed the difference, amounting to slush funds worth {{KRWConvert|30.2|b|to=USD}}. In total, the allegations of misconduct amounted to {{KRWConvert|375.5|b|to=USD}}.

The following year, founder Shin Kyuk-ho was fined {{KRWConvert|3.5|b|to=USD}} and sentenced to four years in prison. At 95 years old, it seemed possible he would spend his last days incarcerated, but he was able to avoid imprisonment due to health issues, eventually passing away in 2020.{{Cite web |date=2020-01-22 |title=Funeral service of late Lotte founder held |url=https://www.koreaherald.com/view.php?ud=20200122000291 |access-date=2024-01-18 |website=The Korea Herald |language=en}}

The founder's son and Chairman Shin Dong-bin was convicted of the charges of embezzlement and breach of trust, while Dong-bin's older brother Dong-joo was acquitted.{{Cite news |last=Zhong |first=Raymond |date=2017-12-22 |title=Chairman of Lotte Group Is Convicted of Graft in South Korea, but Avoids Jail |url=https://www.nytimes.com/2017/12/22/business/korea-lotte-corruption-conviction.html |access-date=2024-01-18 |work=The New York Times}}

On 17 April 2017, Chairman Shin Dong-bin was embroiled in the 2016 South Korean political scandal and charged with bribery.{{Cite news |last=Ju-min Park & Christine Kim |date=17 April 2017 |title=South Korea charges ousted leader Park and Lotte chief with bribery |url=https://www.reuters.com/article/southkorea-politics-park/update-1-s-korea-charges-ousted-leader-park-and-lotte-chief-with-bribery-idUSL3N1HP2RV/ |access-date=18 January 2024 |work=Reuters}} In order to secure a duty-free deal for Lotte, Shin was accused of donating {{KRWConvert|7|b|to=USD}} to a non-profit controlled by incumbent President Park Geun-hye's close friend Choi Soon-sil.{{Cite web |last=Ser |first=Myo-ja |date=2019-10-17 |title=Supreme Court keeps Lotte chairman from jail |url=https://koreajoongangdaily.joins.com/2019/10/17/politics/Supreme-Court-keeps-Lotte-chairman-from-jail/3069176.html |access-date=2024-01-18 |website=Korea JoongAng Daily |language=en}} On 13 February 2018 Shin was fined {{KRWConvert|7|b|to=USD}} and sentenced to 2.5 years' incarceration.{{Cite news |last=Yang |first=Heekyong |date=17 October 2019 |title=Lotte Group chairman stays out of jail as South Korea court ruling upheld |url=https://www.reuters.com/article/idUSKBN1WW0CS/ |access-date=18 January 2024 |work=Reuters}} He was jailed immediately following the sentencing.

Following his conviction, Shin stepped down as Chief Operating Officer of Lotte Group's Japanese-based holding firm but remained on the board of directors.{{Cite web |last=Kim |first=Da-sol |date=2018-02-21 |title=Lotte chief steps down as CEO from Japan-based holding firm |url=https://www.koreaherald.com/view.php?ud=20180221000860 |access-date=2024-01-18 |website=The Korea Herald |language=en}}

In October 2018, an appeals court freed Shin from prison after just 234 days, giving him a suspended sentence of 4 years and cancelling the fine.{{Cite web |last=Kim |first=Sohee |date=5 October 2018 |title=Lotte Chairman Shin Freed as Court Suspends Corruption Sentence |url=https://www.bloomberg.com/news/articles/2018-10-05/lotte-chairman-shin-freed-as-court-suspends-corruption-sentence |access-date=2024-01-18 |website=Bloomberg}} News of Shin's release increased Lotte Group's market value by 4.2%.

A year later, in October 2019, the Seoul High Court upheld the appeals court's decision, arguing that Shin "passively" committed bribery with the understanding that not donating to Choi's non-profit would result in damage to Lotte Group.{{Cite web |last=Lee |first=Minji |date=2019-10-17 |title=(2nd LD) Top court upholds suspended jail term for Lotte chief |url=https://en.yna.co.kr/view/AEN20191017003052315 |access-date=2024-01-18 |website=Yonhap News Agency |language=en}}

Since 2004, Lotte had invested over {{KRWConvert|8|t}} into growing their presence in China, operating 112 Lotte Mart stores, 12 cinemas, and 5 Lotte Department stores by 2017.{{Cite web |last=Kim |first=Da-sol |date=2019-03-13 |title=[News Focus] Lotte seeks to exit China after investing $7.2b |url=https://www.koreaherald.com/view.php?ud=20190313000654 |access-date=2024-01-19 |website=The Korea Herald |language=en}} However, Lotte's Chinese operations had reported net losses of {{KRWConvert|75.3|b}} by 2011, soaring sevenfold in just 3 years to {{KRWConvert|554.9|b}} in 2014.{{Cite web |last= |date=2015-10-28 |title=Lotte suffers over 1tn won loss in China: chairman's brother |url=https://m.koreaherald.com/view.php?ud=20151028001007 |access-date=2024-01-19 |website=The Korea Herald |language=en}}

To counter potential threats from North Korea, South Korea & the US sought to deploy an advanced anti-missile defence system, THAAD, in 2016.{{Cite web |last=Choi |first=Kyong-ae |date=2016-09-30 |title=S. Korea selects golf course as new site for THAAD |url=https://en.yna.co.kr/view/AEN20160930004900315 |access-date=2024-01-19 |website=Yonhap News Agency |language=en}} The site chosen was Lotte Skyhill Country Club in Seongsan due to its high elevation, distance from civilian centres and existing infrastructure.{{Cite web |last=Park |first=Byeong-su |date=2016-10-01 |title=Why was the Lotte Skyhill golf course chosen as the new site for THAAD deployment? |url=https://english.hani.co.kr/arti/english_edition/e_national/763694 |access-date=2024-01-19 |website=Hanyoreh |language=en}} A Lotte spokesperson said that leadership "agonized" over the decision to allow the sale of the golf course for the THAAD system, but concluded their hands were tied: "if we say no to the government, we can't do business in Korea".{{Cite news |last=Cynthia Kim and Hyunjoo Jin |date=25 October 2017 |title=With China dream shattered over missile land deal, Lotte faces costly overhaul |url=https://www.reuters.com/article/idUSKBN1CT35Y/ |access-date=19 January 2024 |work=Reuters}}

The installation of the THAAD system led to a rise in anti-Korean sentiment in China, with much of the ire directed at Lotte.{{Cite news |date=2019-03-13 |title=South Korea's Lotte seeks to exit China after investing $9.6 billion, as Thaad fallout ensues |url=https://www.straitstimes.com/asia/east-asia/south-koreas-lotte-seeks-to-exit-china-after-investing-96-billion |access-date=2024-01-19 |work=The Straits Times |language=en |issn=0585-3923}} Government-controlled news media encouraged Chinese consumers to boycott the Korean conglomerate, and protests were held across multiple cities, with employees of a mall in Xuchang protesting Lotte as they sang the Chinese national anthem.{{Cite news |last1=Hernández |first1=Javier C. |last2=Guo |first2=Owen |last3=Mcmorrow |first3=Ryan |date=2017-03-09 |title=South Korean Stores Feel China's Wrath as U.S. Missile System Is Deployed |url=https://www.nytimes.com/2017/03/09/world/asia/china-lotte-thaad-south-korea.html |access-date=2024-01-19 |work=The New York Times |language=en-US |issn=0362-4331}}

Shortly after news of Lotte's co-operation with the THAAD installation, nearly all of Lotte Mart's 112 Chinese stores were closed down by the government due to supposed fire safety issues. Lotte Department Stores also suffered in the hostile business environment, with an operating loss of {{KRWConvert|140|b}} between 2016 and 2018. Both Lotte Department Stores and Lotte Mart formally ceased trading in China in 2018, with Lotte Chilsung Beverage and Lotte Confectionary leaving China a year later.{{Cite web |last=Kim |first=Jae-heun |date=2022-05-23 |title=Lotte to pull out of China, focus on Southeast Asia |url=https://www.koreatimes.co.kr/www/tech/2024/01/419_329617.html |access-date=2024-01-19 |website=The Korea Times |language=en}}

In 2022, Lotte closed their Chinese headquarters, effectively ending their business operations in the mainland.{{Cite web |last=Van |first=Tong |date=2022-05-23 |title=Lotte prepares to shut its China headquarters |url=https://insideretail.asia/2022/05/23/lotte-prepares-to-shut-its-china-headquarters/ |access-date=2024-01-19 |website=Inside Retail Asia |language=en-US}}

• Lotte World Tower

{{reflist}}

• {{Official website|www.lotte.co.kr/global/en/main.do}}

{{Finance links

|name= Lotte Corporation

|google= 004990:KRX

|yahoo= 004990.KS

|bloomberg= 004990:KS

|reuters= 004990.KS

}}

{{Lotte}}

{{chaebol}}

{{KOSPI 200}}

{{Nongshim}}

Category:Chaebol

Category:Multinational companies

Category:Conglomerate companies established in 1967

Category:Companies based in Seoul

Category:South Korean brands

Category:Companies listed on the Korea Exchange

Category:Companies in the KOSPI 200

Category:Companies in the KSE 100 Index

Category:South Korean companies established in 1967

Category:Shin family

Category:Family-owned companies of South Korea