NPS loses W80 bil. in Lotte investments
By Kim Jae-won
The National Pension Service (NPS) reported an estimated loss of about 80 billion won on its investments in Lotte Group affiliates as shares of the retail giant continue to drop sharply amid a deepening family feud, a financial information provider said Friday.
According to FnGuide, the combined value of the NPS’s stakes in four Lotte affiliates fell 77 billion won from July 27 to Thursday since the group’s Chairman Shin Dong-bin and his older brother and former Lotte Holdings Vice President Dong-joo started fighting over managerial rights.
The pension operator suffered a loss of 32.9 billion won from its exposure to Lotte Chemical over the cited period, followed by 26.37 billion won from Lotte Chilsung Beverage, 10 billion won from Lotte Himart and 7.76 billion won from Lotte Food, the data showed.
The NPS holds a 13.49 percent stake in Lotte Food and a 13.08 percent stake in Lotte Chilsung, a beverage and liquor unit. The fund also owns a 12.46 percent stake in Lotte Himart, a home electronics sales agency, and a 7.38 percent stake in Lotte Chemical.
Shares of Lotte Food, Lotte Chilsung and Lotte Himart rebounded Friday while those of Lotte Chemical continued a losing streak.
What is more embarrassing for the NPS is that it increased its stakes in the companies in the second quarter as part of portfolio adjustments. The NPS’s ownership in Lotte Chilsung rose 2.26 percent in June; and in Lotte Himart, 1.71 percent.
The combined market caps of eight Lotte affiliates have lost 1 trillion won, falling to 23.5 trillion won.
Market watchers urged the NPS to play an active role as a major shareholder, saying it is the biggest “victim” of the internal feud in the Shin family. Former governing Saenuri Party lawmaker Lee Hye-hoon said in a radio interview that it is time for the NPS to flex its muscles.
Dong-bin and Dong-joo both claim that their father and founder of the group Shin Kyuk-ho is on their side. The elder Shin is known to have health problems.
Lotte is the fifth-largest conglomerate in Korea whose business ranges from amusement parks and hotels to department stores in Korea and Japan.