Tycoons reap huge gains on stocks

Business owners who bought stocks in their companies last year are now reaping huge profits thanks to the current bull market, industry officials said yesterday.

According to chaebul.com, an online-based conglomerate information provider, Hanwha Group Chairman and CEO Kim Seung-youn purchased 4.12 million shares of Hanwha Corp. stock at an average share price of 21,000 won ($15.8), from last October to early this year. When the share price went up to 36,550 won on Friday, Kim earned as much as 62.9 billion won from the investment.

Lotte Group chairman Shin Kyuk-ho acquired 72,000 shares of Lotte Shopping stocks for four days in a row from Oct. 28, at an average share price of 130,000 won. As the company`s share price recently soared to over 200,000 won, the chairman reaped 5.3 billion won.

Securities industry officials say that the purchase of a company`s stocks by its owner has a positive effect of conveying confidence to investors, but concerns are also expressed about conglomerate owners who see bearish market trends as opportunities to increase their portion of shares to secure a firmer ground for their children to inherit the companies.

Koo Kwang-mo, son of LG Group chairman Koo Bon-moo, acquired 94,000 shares of LG Holding Corp.`s stocks on Oct. 27, increasing the portion of his shares in the company to 4.53 percent. With the average share price rising to 45,950 won from 36,000 won, he has gained about 900 million won.

Hyosung Group Vice President Cho Hyun-moon, second son of the group`s Chairman Cho Suck-rai, has reported the profit ratio of 122 percent from the purchase of 150,000 Hyosung Corp. stocks last year, as the average share price of the stocks went up from 33,000 won to 73,000 won.

In the case of Hanjin Group, which includes Hanjin Shipping and Korean Air, Cho Won-tae, 33-year-old only son of the Group`s chairman Cho Yang-ho, together with his two sisters, obtained 45,000 shares of Korean Air stocks in October, to earn about 500 million won profit amid the change in the company`s share price from 27,000 won to 39,000 won.

"Corporate owners purchasing their companies` stocks conveys a stronger message that the share price has bottomed than when it is done at the corporate level," Lee Sun-yup, an analyst at Goodmorning Shinhan Securities, said in a recent report. "For the conglomerate owners, increasing their shares in their own companies must be an effective measure to consolidate their positions in the companies, as well for their offspring as their successors," he said.

By Lee Yong-sung



(danlee@heraldm.com)