Investigations and raids force Lotte Chemical to bow out of bidding for US-based Axiall Corp

21-Jun-16

South Korea's Lotte Group said prosecutors are conducting investigations and raids on at least ten units including Lotte Chemical, heaping further pressure on the sprawling beer-to-petrochemicals conglomerate. This has derailed an initial public offering at the heart of a closely watched corporate restructuring, reports The Wall Street Journal. The investigation also forced Lotte to abruptly drop its multibillion-dollar bid to acquire Atlanta-based chemical company Axiall Corp. South Korean media reports said the raids were triggered by an investigation into whether a local cosmetics company allegedly paid bribes in exchange for floor space at Lotte’s duty-free retail outlets.
Lotte Chemical, Lotte Confectionery Co Ltd, Lotte Chilsung Beverage Co Ltd, Hotel Lotte and unlisted Lotte Engineering and Construction among others were the firms raided, a spokesperson said. People familiar with the matter have said the Friday raids, which involved about 200 prosecutors and investigators, were part of an investigation into a possible slush fund.