Beijing Confiscates Lotte Mart Generators, Auctions Them Off, Keeps the Returns. (Image: Yonhap)
SEOUL, Aug. 24 (Korea Bizwire) — According to the “Beijing Youth Daily” on August 23, a Beijing city government task force ordered the removal of Lotte Mart generators in Juixianqiao and Yangqiao on the grounds of excessive energy use last year.
To add insult to injury, the Beijing paper reported that the city had recently confiscated 23 generators and four transformers from the two retail stores and had put the items up for auction.
The proceeds were directed into state coffers.
Though the exact amount has not yet been publicly disclosed, the revenue from the sale could have reached approximately 4 million yuan, around 680 million won.
Considering the fact that 87 of the 112 Lotte Mart stores have ceased business operations since March, the loss of the equipment is unlikely to improve Lotte’s short-term outlook in China.
A member of the task force stated that the inspection “was conducted in order to improve energy efficiency of businesses throughout the entire region.” (Image: Yonhap)
Hong Kong-based paper the South China Morning Post (SCMP) alluded to the possibility of the latest THAAD-based tensions between China and South Korea as a reason for Beijing’s behavior.
“However, it is the latest in a series of incidents in which Lotte Group has found its business subject to sudden tax and safety inspections in China since it allowed a U.S.-backed anti-missile system to be deployed on land it owns in South Korea in a response to the threat from the North,” it reported.
A spokesperson for Lotte’s operations in China, commenting on the incident, said, “Juixianqiao and Yangqiao Lotte Mart branches underwent scheduled inspections in April last year. In November, the branches received the results of the inspection which stated that the equipment was deteriorating and ordered them to be changed.
The branches completed the modifications by April this year, and as Chinese policy stipulates that the government will collect and get rid of the materials, through July and August the existing equipment was divided up and handed in.”
A member of the task force stated that the inspection “was conducted in order to improve energy efficiency of businesses throughout the entire region.”
Considering the fact that 87 of the 112 Lotte Mart stores have ceased business operations since March, the loss of the equipment is unlikely to improve Lotte’s short-term outlook in China. (Image: Yonhap)
S.B.W. (sbw266@koreabizwire.com)
