Many 21st-century billionaires have made their piles from stock investments. On the reverse side, this means that they could also lose their billions on account of stock values.

As a case in point, the prices of stocks in large Korean corporations in the fields of electronics, automobiles and shipbuilding have plummeted, leading to a decrease in local billionaires’ assets.

As of last month, Chung Mong-joon, the largest shareholder of Hyundai Heavy Industries, suffered the biggest drop in his stock value this year, according to FnGuide, a local corporate financial information provider. 

The Korea Herald Investigative Team has delved deeper into why the stock prices held by the nation’s top five billionaires, including Chung, have fallen as of late.

Hyundai Heavy’s largest shareholder, Chung holds 10.15 percent of shares in the company. Currently, the estimated value of his shares is 1.7 trillion won ($1.6 billion), down 1.1 trillion won from the previous year.

This drop was mainly due to the firm’s poor second-quarter performance, according to industry sources.

The lackluster performance was mainly because Hyundai Heavy had offered bargain prices when bidding for offshore plants. Offshore plants, once a significant source of income, lost their luster when the global financial crisis hit in 2008, causing orders to plummet. Companies have since been forced to take what projects they can, at low prices, and the same has happened at Hyundai Heavy, the sources said.

A dispute between the management and labor union over pay and incentives was cited as another reason for the company’s decline in stock value. This was the first time the company failed to reach a compromise since 1995.

Samsung Electronics chairman Lee Kun-hee’s assets fell by 684.6 billion won this year.

While the estimated value of his shares still exceeds 10 trillion won, including his stocks in Samsung Electronics, it may be only a matter of time before the value drops further if Samsung’s downtrend continues.

Lee was hospitalized in May after a heart attack, making it necessary for his only son Jay-yong ― currently vice chairman of Samsung Electronics ― to take charge.

The sudden transition, combined with a saturated global smartphone market, is taking a toll on the company, industry watchers said.

Hyundai Motor chairman Chung Mong-koo’s assets dropped 594.7 billion won compared to last year. Hyundai’s recent purchase of land in Seoul for 10 trillion won is spurring worries about the company’s cash flow.

Hankook Tire has been the No. 1 brand in the domestic tire industry for 20 years. However, the assets held by company chairman Cho Yang-rai fell in value by 19 percent from last year and are now estimated at 1.1 trillion won.

Although not the cause of the decline, a massive fire that broke out at Hankook Tire’s Daejeon plant ― the largest such plant in the country ― did not help the firm. The fire, however, is not expected to disrupt production, the company said.

Lotte Group chairman Shin Dong-bin’s assets decreased by more than 200 billion won compared to last year.

Lotte has been going through various problems including a data leak at its credit card operations, internal corruption and safety concerns regarding the ongoing construction of the Lotte World Tower.

By Korea Herald Investigative Team (hjlee0301@heraldcorp.com)

Kwon Nam-keun
Hong Seung-wan
Sung Yeon-jin
Bae Ji-sook
Yoon Hyun-jong
Min Sang-seek
Kim Hyun-il
Lee Hee-ju