Lotte to approve THAAD deal next month

By Park Jae-hyuk

Lotte Group will sign an agreement to provide its golf course in southeastern county Seongju ㅡ in a land swap ㅡ as a site to host a U.S. Terminal High Altitude Area Defense (THAAD) battery despite Beijing’s possible retaliation, officials said Friday.

Lotte International, a Lotte unit owning the golf club, plans to hold a board of directors meeting in mid-February to endorse the deal to swap the Lotte Skyhill Country Club in Seongju County, North Gyeongsang Province, for military-owned land in Namyangju, Gyeonggi Province.

Earlier this week, the Ministry of National Defense said it might have to delay THAAD negotiations with Lotte originally planned to be finished by January, citing the uncertain schedule of the board meeting.

At that time, Lotte Group claimed an appraisal of the military-owned land and legal reviews on the land exchange procedures would take some time.

The delay raised speculation that the retail giant was reluctant to go ahead with the deal because of economic retaliations against its operations in China which has strongly opposed the deployment of the U.S. missile defense unit here.

However, the group denied such allegations, showing its intent to stick to the land exchange.

“We’ve already agreed to the swap contract and we will abide by this, which has been always our basic stance,” said a Lotte official.

Last September, the group agreed to offer the site as an alternative to the controversial Seongsan anti-aircraft missile base in the same county, but has faced repercussions from Beijing ㅡ its unit in China underwent unusual tax audits and fire safety inspections.

About 150 Lotte Mart outlets, Lotte Department Stores and Lotte Supers in Beijing, Shanghai and Chengdu were targeted by inspections then. Factories of Lotte Confectionary and Lotte Chemical in China were also subject to unexpected scrutiny.

Some observers said that as a result, Lotte Group would delay the THAAD deal as much as possible, noting its attempts to expand its presence in China.

Lotte recently announced it will begin operations of several shopping malls in Shanghai this March and is considering participating in a bid for a new license to operate a duty free store at Hong Kong International Airport.

Also, more than 70 percent of Lotte Duty Free sales come from Chinese tourists; while Lotte Asset Development is building a 570,000-square-meter business complex in Chengdu.

Although Lotte Group has since denied any additional economic retaliation from China, its subsidiaries specializing in retail businesses have reportedly been anxious of risks in doing businesses there.

“In my personal opinion, it’s hard to say the deal would have no adverse impact on our businesses in China,” another official of the conglomerate said. “But the exchange of the land was decided on before, so we will continue to cooperate with the government for national security.”