They were pushing hard to make the IPO happen fast, but these disclosure do not make for a good environment to go public, no matter how large the company.
Lotte Group’s initial public offering of its hotel unit, which may be South Korea’s largest listing on record, will be delayed after reports said a company executive is being investigated, according to people familiar with the matter.
A new timetable for marketing of the IPO, previously scheduled for June 6, hasn’t been set yet, the people said, asking not to be identified as the information is private. A Lotte Group spokesman confirmed that the roadshow schedule will be “adjusted” but declined to comment on the reason.
Prosecutors visited Hotel Lotte Co. with a search-and-seizure warrant late this week as part of a bribery investigation, the spokesman said Saturday. The hotel unit and a company executive are subjects of the investigation, he said. Calls to the Seoul Central District Prosecutors’ Office weren’t answered.
The probe adds a potential roadblock to an IPO intended to fetch as much as 5.7 trillion won ($4.8 billion). Hotel Lotte is a key unit of the group headed by Chairman Shin Dong Bin, who ousted his older brother and sidelined their patriarch father in feud among the family that controls the company.
The company’s chain of hotels, amusement parks and duty-free shops generated more than 5.1 trillion won in revenue last year.
©2016 Bloomberg L.P.
This article was written by Regina Tan and Jung Park from Bloomberg and was legally licensed through the NewsCred publisher network.
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Photo Credit: Roof deck of the Lotte hotel property in New York City. It's planed IPO is being delayed by an investigation. Hotel Lotte