Police investigate Lotte Card executive and rental firm CEO for fraud

Seoul Metropolitan Police Agency's financial crime investigation unit is probing a Lotte Card executive and the CEO of a rental company, identified as Company A, on suspicion of fraud and embezzlement. The investigation was initiated following a complaint filed by a small and medium-sized enterprise (SME) that had entered into a factoring loan agreement with Lotte Card through Company A.

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The claims made by these companies are entirely untrue. They are attempting to delay repayment by dragging out the police investigation.

The core of the allegations centers on significant financial losses incurred by debtors in factoring loans facilitated by Lotte Card. Factoring loans involve a company borrowing funds from a card company using its accounts receivable as collateral. Debtors claim they made payments to Company A, believing their obligations were settled, only to be later notified by Lotte Card of overdue loan payments. This has led to suspicions that Company A misappropriated the funds paid by the debtors.

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We cannot know the transaction details between the rental company and the debtors. If the loan amount was indeed smaller than the rental fee, then the rental company and the debtors deceived Lotte Card, making Lotte Card the victim.

Furthermore, some debtors have pointed out discrepancies between the amounts they believed they owed and the larger overdue amounts reported by Lotte Card. They suspect that Company A may have inflated its accounts receivable to obtain excessive loans from Lotte Card, and question whether Lotte Card was aware of these inflated figures. The SME that filed the complaint alleges violations of laws related to the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, including embezzlement, fraud, and breach of trust.

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The allegations that Lotte Card turned a blind eye to the company's financial difficulties are false. We have simply followed normal procedures to recover our claims following the default.

However, Company A vehemently denies these accusations, asserting that the debtors are attempting to avoid repayment by prolonging the legal process. The company stated it has filed or intends to file defamation and obstruction of business charges against them. Lotte Card also maintains its innocence, stating that it was unaware of the specific transaction details between Company A and its debtors. The card company claims that if the loan amounts exceeded the actual rental fees, then Company A and the debtors deceived Lotte Card, making the card company itself a victim. Lotte Card also stated that the allegations against its executive are based on a misunderstanding of the facts and that they have provided sufficient explanation to the police.

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The allegations against the Lotte Card executive are based on a misunderstanding of the facts, and we have sufficiently explained this to the police.