News Release

GIAA Responds to Alleged Corporate Espionage by former Lotte Executive and DFS

Tuesday, September 18, 2018

September 14, 2018 – “GIAA is aware of recent news reports detailing the criminal indictment of a former Lotte Duty Free executive, Seung-Gyu Lee, who is accused by Korean authorities of revealing Lotte trade secrets to an executive of DFS Group, Andrew Ford, including a copy of the confidential proposal and presentation made to GIAA by Lotte in 2013. The criminal trial is scheduled to commence in October 2018 in the Seoul Southern District Court.

We are deeply concerned by these criminal charges against this former Lotte executive, which implicate DFS and certain of its high-ranking employees, and are looking into the circumstances surrounding the events described in the indictment. As a public agency, GIAA is committed to a rigorous and fair procurement process for all our contracts. We are fully supportive of the investigation into these matters by Korean criminal prosecutors and will cooperate fully with their efforts if called on to do so.

It is disturbing to all of us at GIAA that our airport, which is so key to the health and continued growth of the Guam economy, would be caught in the middle of what appears to be a worldwide battle between two of the leading players in the travel retail industry. It is unfortunate that GIAA has been subjected to five years of litigation by former concessionaire, DFS, as a by-product of this fight. GIAA hopes that all of the questions surrounding the conduct of any of the bidders on the 2012-2013 procurement are resolved before the next solicitation so that the value of the concession is not adversely affected.

GIAA stands behind the 2012-2013 procurement as a fair, open and competitive process that resulted in the best contract that the Airport has ever had. The Lotte contract, which has been in place for the last five years, has paid more than $70 million in revenue to GIAA in contrast to the $32 million paid by DFS during the last five years of its contract. The current contract has also resulted in over $20 million in airport improvements, and was the linchpin in the $247 million bond issue that is funding the construction of the new Arrivals corridor.”

For any questions, please contact Genevieve Rapadas at 646-9355 or [email protected]