South Korea’s Financial Supervisory Service has reportedly decided to suspend the business operations of Lotte Card for 4 1/2 months over a personal data breach, along with a $3.4 million penalty. File Photo by Jeon Heon-kyun/EPA
May 1 (UPI) — South Korea’s Financial Supervisory Service (FSS) reportedly decided Thursday to suspend the business operations of Lotte Card for 4 1/2 months over a data breach.
The financial watchdog is also reported to have finalized the disciplinary measure, including a $3.4 million penalty and a reprimand warning for its former CEO Cho Jwa-jin.
The FSS declined to confirm the reports, while Lotte Card acknowledged it.
“Imposing a business suspension over a hacking case would be an unprecedented level of sanction,” Lotte Card said in a statement.
“As follow-up procedures remain, including a resolution by the Financial Services Commission (FSC), we will fully explain our position regarding the severity of the punishment, as well as our post-incident response efforts,” it added.
Nearly 3 million Lotte Card customers had their personal information compromised last year. The state-run Personal Information Protection Commission has already imposed a $64 million fine on the firm over the incident.
Following the FSS decision, the FSC is expected to make the final call in the coming months.
In 2019, South Korea’s leading private equity company, MBK Partners, teamed up with Woori Bank to acquire a 79.8% stake in Lotte Card for about $1 billion. MBK took 59.8%, and Woori held the remaining 20%.
MBK Partners sought to sell its stake in Lotte Card in 2023 but failed to find a buyer, and a similar effort last year also yielded limited results.
Lotte Card is not publicly listed.