BUSINESS

Scandal-hit cable makers pay high dividends to shareholders

By Korea Herald
  • Published : Oct 20, 2013 - 19:19
  • Updated : Oct 20, 2013 - 19:19

The cable manufacturers involved in a nuclear power industry corruption scandal were found to have paid a large sum of dividends to their shareholders over the past several years.

According to Chaebul.com, an online research company monitoring the country’s top conglomerates, the eight cable suppliers in question paid 76.9 billion won ($72.5 million) in dividends to major shareholders in 2008-2012.

Of this amount, almost 14 billion won was spent on entertainment expenses, while only 7 billion won was used for donations.

Among the eight companies was JS Cable, one of the key parties of the scandal which supplied 47 billion won worth of faulty cables to local nuclear power plants for nine years.

The dividends paid to the stockholders of JS Cable, and its affiliates LS and LS Cable & System, amounted to 59.2 billion won, or 77 percent of the disputed sum.

Earlier this month, the Fair Trade Commission imposed 6.4 billion won in fines on these companies for colluding in the nuclear power plant cable purchasing bid.

“The market for nuclear power generation cables is highly exclusive, with a limited number of suppliers and a predictable bidding schedule,” said an official of the FTC, pledging to keep watch on the corresponding cable companies.

Nuclear industry observers, however, noted that the penalty would be insufficient to prevent irregularities as the fine amount is much lower than the potential profit of a successful bid.

By Bae Hyun-jung (tellme@heraldcorp.com)


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