Some family members of South Korean conglomerates have received large dividends from unlisted affiliates, despite a broader economic slowdown driven by political instability and concerns over US tariffs, financial data showed on Sunday.
According to audit reports posted on the electronic disclosure system by the Financial Supervisory Service, Samyang International Co., an unlisted affiliate of GS Group engaged in golf and tobacco retail, paid out a total of 10 billion won ($7.25 million) in dividends over the past year.
The dividend payout exceeded the firm’s annual net profit of 9.19 billion won, reports Yonhap news agency.
Of the 10 billion won, an estimated 8.2 billion won is believed to have gone to three members of the GS Group founding family, including Huh Joon-hong, the company’s largest shareholder and heir apparent of the conglomerate.
Huh and his relatives have also received dividends worth a combined 13.2 billion won from two other unlisted affiliates, including Samjoung Development Co.
Meanwhile, K Cube Holdings Co., a company wholly owned by Kakao Corp. founder Kim Beom-su, has decided to pay out 15 billion won in dividends despite a net loss of 3.35 billion won last year.
Gwangyoung Construction Co., an unlisted affiliate of real estate giant Booyoung Group, recently distributed 16.3 billion won to Chairman Lee Joong-keun and 3.2 billion won to his eldest son, Lee Sung-hoon, even though the company’s net profit stood at just 14.7 billion won last year.
Experts noted that the government should tight regulations on corporate governance and the oversight role of boards at unlisted firms.
“Financial sanctions should be strengthened for suspicious transactions between listed and unlisted companies,” said Lee Hyo-seob, a researcher at the Korea Capital Market Institute. “Reward systems for whistleblowers also need to be significantly enhanced.”
