Lotte World Tower (Image courtesy of Lotte Corporation)
SEOUL, Dec. 2 (Korea Bizwire) – Lotte Group has requested a police investigation into individuals responsible for creating and spreading false rumors, including allegations of the group facing a moratorium, which the company says are baseless.
According to legal sources on December 2, Lotte Holdings filed a complaint with the Gangnam Police Station in Seoul, seeking to prosecute those involved in disseminating the rumors under charges of credit damage.
The controversy began on November 16 when two YouTube channels uploaded videos titled “Lotte Group Facing Disbandment Crisis.” The following day, summarized versions of these claims circulated as “jirasi” (unverified information leaflets).
While the YouTube videos pieced together prior media reports about Lotte affiliates, they stopped short of outright conclusions.
In contrast, the jirasi contained definitive falsehoods, such as allegations that Lotte would declare a moratorium in early December, that unsold units in Lotte Construction projects had caused inter-affiliate financial guarantees to collapse, and that mass layoffs exceeding 50% of the workforce were imminent. These claims were later debunked as entirely fabricated.
In response, Lotte issued a public disclosure on November 18, categorically denying the liquidity crisis rumors. Simultaneously, the group began exploring legal options against those responsible for spreading the misinformation.
The company stated that the rumors significantly damaged its reputation, destabilized affiliate stock prices, and caused unnecessary fear in financial and securities markets.
Under South Korean law, disseminating false information or using deceptive tactics to harm a party’s credit can result in up to five years in prison or a fine of up to 15 million won (approximately $10,600). Unlike defamation, which protects personal dignity, credit damage charges address harm to economic trustworthiness, including payment capacity or intent.
Authorities have historically applied similar laws to combat the spread of harmful jirasi. Lotte Group’s case underscores the growing need to address misinformation in an era where such content can significantly impact corporate reputation and market stability.
Ashley Song (ashley@koreabizwire.com)
