One-third of retail giant Lotte Group's affiliates operating in South Korea are classified as foreign-invested firms and enjoy special benefits, a lawmaker claimed Tuesday.

Citing government data, Rep. Kim Ki-jun of the main opposition New Politics Alliance for Democracy said 28 of Lotte's 81 affiliates and most of its large units are foreign-invested companies.

Lotte is South Korea's fifth-largest family-run conglomerate, or chaebol, with total sales hitting 112 trillion ($93.3 billion) won in 2014.

Of the eight Lotte affiliates listed on the local stock exchange, Lotte Confectionery Co., Lotte Insurance Co. and Lotte Chemical Corp. are registered outright as foreign firms, Rep. Kim said.

The revelation comes as Lotte received flak in the past for receiving various tax benefits and for securing the rights to operate lucrative duty- free stores. More recently, Lotte faced sharp public criticism when the two sons of the founder Shin Kyuk-ho engaged in high profile mud-slinging to win control of the conglomerate.

"Among major affiliates, only Lotte Card Co. and Lotte Shopping Co. are local companies with the rest, including Hotel Lotte, Lotte Corp., Lotte Aluminium, Lotteria and Korea Seven Co. which operates local 7-Eleven stores in the country, being foreign," the lawmaker said.

Lotte Holdings Japan and subsidiaries of a Japanese investment company, dubbed "L Investment Company," were the largest shareholders of Lotte affiliates, with 22 of the 28 affiliates legally considered Japanese firms or companies with head offices in known tax havens such as the Cayman Islands, he said.

The lawmaker said the 28 foreign-invested Lotte affiliates accounted for 46 percent of the conglomerate's sales and 43 percent of its net earnings, and that these companies also controlled 21 other local Lotte affiliates.

"In effect, 64 percent of Lotte affiliates are being run by Japanese companies," the lawmaker argued.

Because foreign-invested companies get special benefits ranging from preferential corporate, income, property, and registration tax rates, there is a need to review the existing rules, he said.

"If Lotte wants to be seen as a local company it needs to voluntarily give up its foreign-invested enterprise status and not receive special benefits," the lawmaker said. (Yonhap)