Lotte stores sever ties with Seo’s restaurantsLotte Department Store pulled out of three of the nine restaurants owned by Seo Mi-kyung, the common-law wife of Lotte founder Shin Kyuk-ho.
The retailer said Wednesday that it terminated contracts with two Lotteria branches and the Korean cold noodle restaurant Yoowonjeong, which were all operated by Yuki Co., a private enterprise whose de facto owners are Seo and Shin Yu-mi, her daughter with Lotte’s founder.
The fast-food affiliate Lotteria in Lotte Department Store’s Yeongdeungpo branch was shifted to be directly managed by headquarters and the noodle restaurant in the same department store was replaced.
Seo is now associated with just six restaurants, including the Yoowonjeong in Lotte Department Store’s Sogong-dong branch.
“We decided to close down every restaurant run by Seo,” said a spokesman for Lotte Department Store.
“There are still restaurants whose lease contracts are not terminated, but they will be closed upon expiration,” the source added. Lotte Group has already moved to end contracts with the women in the owner’s family.
In 2013, it terminated contracts with companies that were in charge of Lotte Cinema’s snack bars, privately owned by Seo and Shin Young-ja, the founder’s first daughter. Since then, Lotte Cinema’s snack bars have been managed by headquarters.
Industry insiders view the measure as the start of Lotte ending its tacit custom of giving business favors to the founder family’s female members, instead of allowing them to participate in business management.
Seo and her daughter are major stakeholders in Uniplex, Yuki Co., Yuwon Industry and Yuki International, in which founder Shin lent more than 40 billion won ($36.4 million) but initially did not register them as subsidiaries. In Feb. 2015, a new law imposed penalties if a subsidiary, of which a founder family owns more than 30 percent, earns more than 20 billion won or 12 percent of revenue from internal transactions.
Meanwhile, Seo and her daughter along with Shin Young-ja are being investigated on charges they evaded taxes on founder Shin’s gift of 6 percent of Lotte Holding’s shares.
BY LEE HYUN-TAEK [firstname.lastname@example.org]
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