South Korea prosecutors raid more Lotte Group firms

South Korean prosecutors carried out further raids on businesses of the Lotte Group, a sprawling conglomerate at the centre of a bribery probe.

At least 10 divisions were raided including its chemical and confectionery businesses, a spokesman said.

The raids come after police swooped on the group’s headquarters on Friday.

This caused the company to pull out of a stock market share sale worth as much as $4.5bn (£3bn).

The allegations and police action also led Korea’s fifth largest conglomerate to pull out of bidding for the US chemicals company.

Shares in both the chemical and confectionery group have fallen sharply since Friday’s raid.

Bid withdrawn

People familiar with the matter told Reuters that Friday’s raids, which involved about 200 prosecutors and investigators, were part of an investigation into a possible slush fund, although the Seoul prosecutors office could not be reached for comment.

Lotte’s offer of shares to the public, known as an initial public offering, had been intended in part to simplify the ownership structure and improve corporate governance at the group.

This followed a bitter feud over succession among the founding Shin family last year drew wide public criticism.

The group has more than 90 firms in sectors as diverse as beer, hotels and chemicals, and annual revenues of around $60bn, according to the Korea Fair Trade Commission.