Lotte kickbacks used for political lobbying: Report

SOUTH KOREA - Prosecutors are expected to widen the investigation into Lotte Homeshopping's graft allegations after finding evidence the retailer received kickbacks from suppliers to lobby political officials, local media reported Tuesday.

Executives of the country's fifth-largest retailer, including former head Shin Heon, have been under probe for allegedly taking billions of won in cash in return for business favors, such as securing primetime spots on its home shopping channel.

The Seoul Central District Prosecutors' Office suspects the kickbacks were put into slush funds to lobby politicians to gain business benefits, reports said.

Currently, the investigation is largely focused on Shin, 60, who is believed to have orchestrated the crime while heading the retailer from 2008-2010. Shin now serves as CEO of Lotte's department store chain, Lotte Shopping.

"Much of the investigation into Shin is done," an official from the prosecution said, adding that it would likely request an arrest warrant for him this week.

Prosecutors believe that Shin turned a blind eye to company executives taking bribes from subcontractors, and took a large portion of the money to create slush funds.

Shin reportedly kept silent when asked about handing over the money to politicians, prosecutors said.

Noh Dae-rae, chairman of the Fair Trade Commission said during Tuesday's National Policy Committee that Lotte's alleged graft scandal was a violation of Korea's fair trade law.

"We will sternly deal with the retailer if the company is found guilty of the charges," Noh said.