[THE INVESTOR] The probe into Lotte Group has churned up suspicions old and new.

The main suspicions surround the Lotte World Tower in southern Seoul. The group had failed to receive government approval for the plans from the early 1990s to the late 2000s due to resistance from the military over safety concerns about Seongnam Airbase, a military installation south of Seoul.


During the Lee Myung-bak administration, however, the project was given the green light, with Lotte Group footing the bill to adjust the angle of the airbase’s eastern runway by 3 degrees.

With the recent probe allegedly finding a money trail leading to a retired Air Force general, the old rumors have come back with renewed vigor.

It has been alleged that the former airman received large sums from Lotte Group, and played a key role in Lotte Group lobbying to military officials.

Another key question that has risen is whether the group and the Shin family’s vast real estate instrumental in building slush funds.

Lotte founder Shin Kyuk-ho has long had a reputation for having an eye for real estate, managing to turn profits with most --- if not all -- transactions.

However, speculations and evidence suggesting that Shin illegally mobilized Lotte companies’ funds to make his transactions have emerged since the June 10 raid on Lotte firms and locations linked to Shin and his younger son Shin Dong-bin.

According to chaebul.com, a website specializing in information concerning family-run conglomerates, Lotte companies have bought 11 properties owned by Shin since 2000.

The properties, with a combined area of about 1,876 hectares, saw 65.1 billion won ($55.5 million) of Lotte firms’ funds end up in Shin’s hands.

Aside from deals between Shin and Lotte firms, a transaction involving Lotte Shopping and Lotte Scholarship Foundation is also drawing attention.

On Oct. 17, 2007, Shin donated a 100 hectare piece of land in Osan, Gyeonggi Province, to the Lotte Scholarship Foundation after having held onto it since 1973.

A day after the donation, Lotte Shopping’s board of directors approved plans to purchase the land from the foundation at 70 billion won. Lotte Shopping and the foundation signed the deal on Nov. 9 of that year. However, on Dec. 17, Lotte Shopping’s board of directors approved raising the price to 103 billion won, pushing it up by more than 30 billion won in the span of five weeks.

By Choi He-suk (cheesuk@heraldcorp.com)