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Lotte confirms it gave even more to K-Sports

Oct 29,2016
The K-Sports Foundation may have pressured Lotte Group to provide it additional funding by taking advantage of the vulnerable position the group was situated in at the time.

Lotte Group confirmed Thursday that it gave an additional 7 billion won ($6.1 million) to the foundation in May through six of its affiliates. The group had already contributed 1.7 billion won to the foundation in January, along with a dozen other conglomerates that helped the problematic foundation raise 28.8 billion won just one week after its launch.

In May, when the group coughed up 7 billion won to the scandal-ridden foundation - most of which reportedly went to the president’s longtime friend, Choi Soon-sil - Lotte was in a fierce power struggle between the two heir brothers over group succession and was facing investigation over alleged business malpractices.

The Hankyoreh Newspaper on Thursday reported that Choi and An Chong-bum, the senior presidential secretary, strong-armed the group into donating, based on an internal document the newspaper obtained exclusively.

The document, which dates back to March 28, details the agreement made between Lotte Group and the foundation on how much the conglomerate could fund projects claiming to support domestic sports talents by constructing training centers.

“[Lotte Group] has the intention to contribute 3.5 billion won (half the construction fee) but will confirm later after consultation,” the document was quoted as saying in Hankyoreh.

Sources from the foundation said they received numerous calls from An and Choi while the negotiation was ongoing in May. An asked several times whether “talks with Lotte were going well” and said “it is of utmost importance to VIP [President Park].”

“Talks on donation first started in March 17 when key executive members of K-Sports Foundation visited Lotte headquarters in Sogong-dong [central Seoul],” a source from Lotte Group said.

But the finalized amount made in May was 7 billion won, almost double what was initially agreed. It is speculated that the foundation took advantage of the group’s ongoing feud between Shin Dong-bin and Shin Dong-joo and mounting allegations regarding a slew of improper business transactions.

The foundation, however, returned every penny of the donation back to the group 10 days later, saying they had failed to obtain the property they were originally planning to use the money for.

Only 10 days after the money was returned, an unprecedented large-scale prosecutorial investigation was launched, looking into the nation’s fifth largest conglomerate, on June 10.

Choi and An might have also pressured SK Group to provide donations to the foundation.

Jung Hyun-sik, a former secretary general of K-Sports Foundation recently revealed that Choi ordered him to visit SK Group to attract additional investments.

SK Group also refuted the allegation, saying, “we were never requested to pay 8 billion won to the foundation.”

BY JANG JOO-YOUNG, JIN EUN-SOO [jin.eunsoo@joongang.co.kr]


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