South Korean prosecution is investigating Lotte Group founder Shin Kyuk-ho for the allegation of dodging taxes worth about 600 billion won ($539 million), according to sources on Thursday. Shin is suspected of illegally transferring 6 percent of stakes in Japan-based Lotte Holdings Co. he had held under a borrowed account to his oldest daughter and President of Lotte Foundation Shin Young-ja, his third wife Seo Mi-kyung and youngest daughter Shin Yu-mi in 2005. If it is confirmed, the 600 billion won would the biggest-ever amount in the history of the tax evasion cases related to conglomerates in Korea, the sources found.

Seoul prosecutors raided the group’s policy headquarters on Thursday after tracking down evidence of suspicious financial transactions of its family owners.

The clampdown came after prosecutors raided a law firm known to have aided the illegal stock transferring of the group on Tuesday and investigated an unnamed lawyer who allegedly led the advising. The lawyer will be summoned again on Friday.

Prosecutors reportedly believe that Lotte’s policy headquarters spearheaded the illegal transactions and the lawyer played an important role in the practice. The group is also suspected of setting up four paper companies in the United States, Hong Kong and Singapore to avoid the huge amount of taxes according to the lawyer’s advice.

The prosecution plans to summon Seo and her daughter Shin right after analyzing the evidence.

Prosecutors are also set to probe the alleged favoritism charges on the group. The group has been suspected of arranging illegal practices to favor the businesses that Seo and her daughter Shin own such as operation of Lotte Cinema’s cafeteria, Lotte Department Store’s restaurants and other real estate business.

By Chung Joo-won

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