 |
| Samsung Securities CEO Koo Sung-hoon |
An unprecedented scandal engulfing Samsung Securities has left an indelible taint on the brokerage's reputation, amid growing criticism over the brokerage's error in paying dividends.
Samsung Securities shareholders are demanding immediate compensation for their losses, but the brokerage has yet to come up with a solution.
Analysts say the firm isn't likely able to recover its tarnished image in the foreseeable future.
The nation's top financial watchdog also held an emergency meeting with Samsung Securities CEO Koo Sung-hoon, Monday, calling on him to take responsibility for the firm's error.
Last Friday, the securities firm mistakenly gave 2.8 billion shares to its workers who own company stock when it was supposed to pay 2.8 billion won ($2.7 million) in dividends to the workers.
Of those 2.8 billion shares worth 110 trillion won, the brokerage admitted 16 workers sold about 5 million shares, escalating the unprecedented mishap.
"Samsung Securities should settle the crisis immediately. The company CEO should take full responsibility to help ease shareholder damage," Financial Supervisory Service (FSS) Senior Deputy Governor Won Seung-yeon said during a press conference, Monday.
Attributing the scandal to lack of management and oversight at Samsung Securities, the FSS said it will conduct an in-depth inspection of the company's management system over 10 days.
The FSS added it will take "necessary measures" if the brokerage is found to have operated improperly while hinting it may expand its investigation industry-wide, but analysts say the task may face an uphill battle.
"Samsung Securities won't be able to win back investors' trust anytime soon," a Nomura Securities analyst said. "Sixteen workers, who mistakenly received stocks as dividend, immediately sold their shares as soon as the market opened Friday. Their ethical standards should be put into question."
The brokerage's leading analyst was also found to be one of those workers who sold their shares. The unnamed analyst, who was supposed to receive 784,000 won ($734) in dividends, reportedly got 784,000 shares instead, Friday. The analyst immediately sold the shares worth more than 30 billion won on the day, according to sources.
Samsung Securities attempted to calm the situation by saying: "A very limited number of workers who mistakenly received the company stock immediately sold their shares on the market." But the scandal is not likely to be eased anytime soon as analysts of other securities firms even raised the possibility a small number of the brokerage workers intentionally staged the crisis to earn illicit gains through the company's systemic loophole.
"It just doesn't make sense at all," said a major securities firm analyst who requested not to be named.
"Samsung Securities is one of the nation's top three brokerages. I just don't believe the company system is primitive enough to allow creating 2.8 billion nonexistent shares instead of 2.8 billion won in dividends. There must be a scheme behind the scandal."
![[ANALYSIS] Tesla, BYD's price cuts unnerve LGES, Samsung, SK](https://img.koreatimes.co.kr/upload/thumbnailV2/b1cf8ba68d474cb69352bfe7ea9d14f0.jpg/dims/resize/178/optimize)
![[INTERVIEW] How ATEEZ achieved worldwide success](https://img.koreatimes.co.kr/upload/thumbnailV2/c7723b56dde94eb4b260950d368fe8fb.jpg/dims/resize/178/optimize)
