Published : 2014-04-14 20:40
Updated : 2014-04-14 20:40
In clear contrast to Korean stockholders, who get the smallest of dividends in the OECD, conglomerate chiefs and their family members received huge dividends last year from their unlisted affiliates.
The amount includes dividends from money-losing operations, and this has once again aroused skepticism about the integrity of Korea’s family-owned conglomerates.
According to a corporate audit report submitted to the Financial Supervisory Service on Monday, Booyoung Group’s chairman Lee Joong-keun and his son Lee Sung-hoon received a total of 10 billion won ($9.6 million) in dividends from a civil engineering affiliate.
In sharp contrast, the company’s total net profit in 2013 reached just 770 million won.
Chairman Lee also took dividends from other affiliates. In total, he raked in 27.8 billion won. Booyoung is the nation’s 28th-largest conglomerate but all of its affiliates are currently unlisted.
Similarly, Hyundai Group’s struggling IT service provider Hyundai U&I recorded a 9.2 billion won deficit last year but allocated 1.2 billion won and 200 million won to Hyun Jeong-eun and her daughter Chung Ji-ee respectively.
Hyosung chief executive Cho Hyun-joon and KCC chief executive Chung Mong-ick, too, received 4.4 billion won and 4 billion from their unlisted affiliates, the data showed.
Samsung, the nation’s largest conglomerate, used its unlisted companies such as Samsung SDS and Samsung Fund to pay 2.2 billion won and 1.4 billion to heir apparent Lee Jay-yong. Lee’s sisters, Boo-jin and Seo-hyun, also took 750 million won each from Samsung SDS.
Meanwhile, Kyowon, a group specializing in educational content and water purifiers, distributed 20.3 billion won to its group chairman Chang Pyung-soon, thus beating many of the top-ranking conglomerates.
Considering that 420 among 1,098 unlisted companies have not yet submitted their report to the FSS, the actual amount paid out to conglomerate chiefs is expected to be much higher than reported.
Though there is no legal ceiling on the amount of dividends, the huge sum raked up by chairpersons and their families drew criticism, especially among ordinary shareholders whose average dividend rate was around 1 percent, the lowest among OECD states.
“Unlisted companies of major conglomerates are often used for internal transactions and their profits are directly transferred to the dominant family members,” said an official of the financial watchdog.