[News Space=Reporter seungwon lee] Lotte Group has requested the police to investigate and punish those who created and distributed false information leaflets about a liquidity crisis, etc. The intention is to find the person who first distributed the information and set things right, as the content of the false information has spread like wildfire and caused significant damage.

According to Lotte Holdings on the 2nd, the group’s law firm requested an investigation by the Gangnam Police Station in Seoul, asking them to find and punish the person who wrote and distributed the rumor for credit damage. Lotte is understood to have requested an investigation after consulting with legal counsel, judging that the rumor caused a significant drop in the stock prices of its affiliates, creating anxiety in the market and damaging the group’s credit. In fact, on the 18th of last month, the stock prices of major listed affiliates such as Lotte Holdings, Lotte Chemical, and Lotte Shopping evaporated by about 600 billion won in a single day.

On November 17, a rumor titled “Lotte, the second Daewoo Group, on the verge of collapse” was circulated. The rumor contained false information in definitive terms. As a result, rumors spread on social networking services (SNS) that Lotte would declare a moratorium in December due to liquidity issues.

This article also states, "Lotte Holdings, the holding company, Lotte Chemical, and Hotel Lotte, excluding Lotte Shopping's debt, triggered a liquidity crisis for the entire group with 29.9 trillion won," and "Failure to acquire Hanssem, Iljin Materials, Ministop, and Joonggonara and decline in performance, failure to overcome Lotte's limitations unique to offline department stores (e-commerce Lotte On deficit in the trillions of won), and joint guarantees between affiliates by banks are a fatal blow due to unsold Lotte Construction properties."

It also included many unconfirmed details, such as, “It seems unlikely that debt will be easily repaid even if the group-owned real estate is sold; it is expected that more than 50% of all employees will be reduced, mainly in distribution affiliates; the financial authorities have been keeping a close eye on the financial market repercussions caused by Lotte since last year.”

The day before the rumor spread, a video titled “Lotte Group’s Collapse Crisis” was uploaded to two YouTube channels. The content was controversial because it was a patchwork of previous reports about Lotte affiliates, but the flyer summarizing it contained many false facts with definitive expressions.

The next day, Lotte announced that “the rumors of a liquidity crisis are groundless.” Unusually, it disclosed the status of the group’s assets. It also provided Lotte World Tower, the group’s symbol and core asset, as collateral for Lotte Chemical’s corporate bond offering. Since then, it has been considering legal action against those who wrote and distributed the flyers.

A person who spreads false information under the criminal law or damages 'credit' through other means shall be punished by imprisonment for not more than 5 years or a fine not exceeding 15 million won. Defamation is committed when personal value is violated, and credit damage is committed when trust regarding economic evaluation, payment ability, or willingness to pay is violated.

Meanwhile, in order to alleviate concerns about a financial crisis, Lotte held a corporate briefing session for major institutional investors on the 28th of last month and announced countermeasures such as promoting the sale of key affiliates and stores, re-evaluating land assets, and reinforcing bank guarantees by providing Lotte World Tower as collateral.