Former Lotte Duty Free executive indicted in South Korean court - KUAM.com-KUAM News: On Air. Online. On Demand.

Former Lotte Duty Free executive indicted in South Korean court

Posted: Sep 12, 2018 4:42 PM +10:00 Updated:

A former high-ranking executive of Lotte Duty Free has been indicted in a South Korean court on white collar crime charges. The indictment accuses him, in part, of passing on highly confidential information to Lotte business rival DFS regarding the $150 million Guam airport retail concessionaire contract.

The indictment filed by the seoul southern district prosecutors office accuses former Lotte executive S-Y Lee of violating the unfair competition prevention and trade secret protection act. The document states Lee resigned from Lotte when he thought he would be passed over for a promotion to company director. Prosecutors allege that he later met in Hong Kong with a top DFS executive, identified as Andrew Ford, and that he allegedly passed on confidential information about Lotte's plans for new businesses in 11 countries, including Guam.

Among the documents Lee allegedly provided included the bid proposal for the 2013 retail concession contract and other highly sensitive financial, operational, conceptual and marketing strategies. Prosecutors say such disclosures are prohibited by Lee's confidentiality agreement. They allege that he released the trade secrets for the purpose of taking improper profits or causing damage to his former employer.

In a statement, Lotte Korea attorney Jin Park described the alleged scheme involving global competitor DFS as "truly regrettable, and outrageous." Lotte's Guam counsel Cesar Cabot says Lotte believes there is a connection between the indictment and allegations of stealing trade secrets involving the GIAA duty free RFP and the pending lawsuits between Lotte, DFS and GIAA.

local counsel has filed new motions in its legal battle with DFS. One of the filings asks the court to take judicial notice of the indictment, and pause all proceedings until the Guam supreme court rules on the airport's appeal of Judge Arthur Barcinas' decision earlier this year that voided the GIAA-Lotte deal, and ordered the contract to be re-bid. 

DFS Local counsel Pat Civille says the company denies any wrongdoing, and denies DFS was trying to extract the confidential information. He says it was the disgruntled former Lotte employee who approached DFS about alleged misconduct. Civille says more importantly, S-Y Lee's alleged involvement surfaced long after the retail concession bid proposals were submitted. 

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