Lotte Hotels scraps float plans amid family feud and bribery claimsComments Off on Lotte Hotels scraps float plans amid family feud and bribery claims
A hotels chain has checked out of its plans for a huge flotation amid claims of a Lotte of dirty laundry, including allegations of embezzlement and bribery, and a ferocious family feud that makes the Miliband brothers’ leadership battle look mild.
South Korean conglomerate Lotte Group had intended to kick off a $4.5 billion initial public offering for its Lotte Hotels arm, which owns the New York Palace hotel where President Obama stays and is the world’s third-biggest duty-free shopping company.
But that was axed after South Korean prosecutors raided Lotte’s offices, with insiders telling Reuters that this was due to reports of a slush fund.
A separate investigation is looking into possible bribery at the firm, with allegations that the sister of Lotte Group’s chairman and other executives accepted payments from a cosmetics giant for special treatment in shops.
Meanwhile Lotte is still in the throes of a huge power struggle at the top of the business. Chairman Shin Dong Bin faced down an attempted coup by his older brother and his father, who founded the group and was then chairman.
Shin then sidelined his father into an honorary position and stripped his brother of his job. The brother has since tried to regain his position and boot out Shin, without success.
The cancelled float, which the company blamed on “international and external issues”, is bad news for the banks on the roster including Citigroup and Bank of America Merrill Lynch.