Chinese authorities have seized machinery equipment from outlets of South Korea’s Lotte Group after forcing the retail giant to close most of its stores in the country in retaliation against its yield of land to host an American antimissile system Beijing vehemently opposes.

According to the Beijing Wanbao newspaper on Wednesday, Beijing Development and Reform Commission confiscated 23 generators and four power transformers from two Lotte Mart stores, saying that the stores’ power usage has exceeded the city’s energy standards. The inspection was part of a citywide crackdown to enhance energy efficiency, the commission said.

The seized machinery would be dismantled and auctioned off, according to the report. The proceeds, estimated to be over 4 million yuan won ($600,638), will go to the state offers.

China’s latest clampdown on Lotte stores comes after the Korean conglomerate was forced to shut 87 out of 112 of its stores in China for fire safety and environmental reasons following its decision to give up its land in Seongju in February for the deployment of the U.S. anti-missile system called the Terminal High Altitude Area Defense (THAAD) system.

Hong Kong’s South China Morning Post viewed the recent move as part of China’s retaliation measures over Seoul’s deployment of the missile system, which Beijing fears could be used to spy on its military. The paper reported that Lotte Group was “subject to sudden tax and safety inspections in China” after allowing the defense shield to be built on the land that it used to own.

Lotte Mart’s losses in China over the past four years have ballooned to 496 billion won ($440 million), with the losses likely to widen this year as diplomatic standoff fails to ease.

Lotte Mart is still paying 60 to 70 percent of salaries to local employees despite the business suspension. Some Chinese retailers seeking to profit from the situation have offered to acquire Lotte Mart outlets in the country at fire-sale prices, according to sources.

An unnamed Lotte Mart official said the company could consider shedding money-losing stores as part of its ongoing streamlining efforts. But he emphasized that a complete pullout from China is not an option.

By Park Man-won and Sohn Il-seon

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]