[THE INVESTOR] Some offshore companies may have possible links to the embattled Lotte Group, which is facing a widening probe over alleged embezzlement and slush fund creation.

Lotte Group Limited and Lotte Farm Group Limited, which were incorporated in the tax haven British Virgin Islands in 2012 and 2011, respectively, are listed in the Panama Papers -- which features millions of leaked documents on offshore companies and their ultimate beneficiaries -- reviewed by The Investor on June 15. 

These two companies are also based in Hong Kong, raising questions about their links to the Hong Kong-based Lotte Shopping Holdings, which operates as a subsidiary of Lotte Shopping, a TV shopping channel under retail giant Lotte.

Another company Lotte Impex Incorporation is also listed in the Panama Papers, suggesting its possible connection to the retail giant.

Lotte is already under suspicions of creating paper companies to siphon funds to offshore accounts.

According to local daily Munhwa Ilbo on June 14, prosecutors suspect Lotte may have embezzled funds when acquiring Chinese TV home shopping channel Lucky Pai in 2010.

When Lotte Shopping purchased Lucky Pai, the company created the Cayman Islands-based LHSC Limited to purchase a 63.2 percent stake in Lucky Pai at an above-market price. Hong Kong-based Lotte Shopping Holdings is the largest shareholder of LHSC, with a 50.09 percent stake.

By Ahn Sung-mi (sahn@heraldcorp.com)