Move ramps up pres­sure on con­glom­er­ate amid Seoul-Bei­jing stand­off

New Straits Times - - Busi­ness World - SEOUL/SHANG­HAI

CHI­NESE au­thor­i­ties have closed nearly two dozen re­tail stores of South Korea’s Lotte Group fol­low­ing in­spec­tions, ramp­ing up pres­sure on the con­glom­er­ate amid a di­plo­matic stand­off that has cast a chill over busi­ness ties be­tween the two na­tions.

Lotte said yes­ter­day 23 of its China su­per­mar­ket stores had been shut, reach­ing from Dan­dong on China’s North Korean bor­der to the wealthy east coast and south­ern Changzhou, mark­ing a wide clamp-down on the group in its big­gest over­seas mar­ket.

A Lotte Mart spokesman could not pro­vide fur­ther de­tails, but work­ers at three stores said the clo­sures — which they said were tem­po­rary — were fire-safety re­lated.

The An­hui fire de­part­ment said in a post on its Sina Weibo mi­croblog ac­count yes­ter­day it had tem­po­rar­ily shut two Lotte Mart stores due to fire risks, part of a broader re­gional sweep over the last month that had led to the clo­sure of 30 stores be­long­ing to a range of com­pa­nies in­clud­ing Lotte.

The Lotte clo­sures are the lat­est in a se­ries of in­ci­dents af­fect­ing South Korean com­pa­nies in China af­ter cy­ber at­tacks and a ban on sales of travel tours to South Korea.

Lotte Mart had 115 stores in China as of Jan­uary, con­tribut­ing to group sales there of over three tril­lion won (RM11.57 bil­lion) in 2015.

The in­ci­dents come af­ter Lotte ap­proved a land swap out­side Seoul last week that will al­low South Korea to in­stall the United States’s Ter­mi­nal High Al­ti­tude Area De­fense (THAAD) sys­tem, in re­sponse to mis­sile threat from North Korea.

South Korea’s mil­i­tary ear­lier yes­ter­day said North Korea fired four bal­lis­tic mis­siles into the sea prompt­ing act­ing pres­i­dent Hwang Kyo-ahn to call for THAAD’s swift in­stal­la­tion.

On Chi­nese so­cial me­dia, pho­tos and videos cir­cu­lated of protests out­side Lotte stores, while oth­ers showed Lotte out­lets with their steel grates pulled shut.

Out­side one store, a red ban­ner with large white char­ac­ters read: “South Korea’s Lotte has de­clared war on China. Lotte sup­ports THAAD. Get the hell out of China.”

The Lotte Group said it was seek­ing as­sis­tance from the South Korean gov­ern­ment re­gard­ing the is­sues it was fac­ing in China, where it em­ploys around 20,000 peo­ple — a third of its over­seas staff.


A po­lice­man di­rect­ing traf­fic out­side a Lotte store in Shenyang, China. South Korean con­glom­er­ate Lotte Group says it em­ploys 20,000 peo­ple in the main­land, where it has 115 stores.

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