LG Group shares fall after raid
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Corporate transparency is a key issue in South Korea.
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SEOUL, South Korea (Reuters) -- Shares in major LG Group companies are down sharply on Wednesday following reports South Korean state prosecutors had widened a political funding investigation at an LG unit.
A spokesman for LG Home Shopping Co said prosecutors searched its main offices in Seoul on Tuesday, without elaborating.
State media reported the search was part of the investigation into a political fund scandal.
"Prosecutors rushed in yesterday afternoon and took accounting documents," said the spokesman, who declined to be named. "We have no idea on what's going on as the scandal has more to do with the parent group, not us."
Prosecution officials were not available for comment.
In Wednesday morning trade, LG Electronics is down 5.4 percent to 54,400 won, LG Corp is down 12 percent to 8,550 won and LG Home Shopping is 10.5 percent lower at 54,600 won.
The market's broad Kospi index is about 3 percent down to 775.23 points.
The raid on LG Home Shopping sparked concerns in the stock market that the probe could spread into other business conglomerates, potentially affecting investor confidence about transparency in their management practices.
The prosecution has already banned about 20 executives at LG and other business groups from leaving the country because of the probe, which was launched after an aide of President Roh Moo-hyun was arrested for taking money from SK Group.
Copyright 2003
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
