Business - The Korea Times

Financial watchdog punishes 3 brokerages in Lime fund scandal

South Korea's financial regulator on Friday ordered three brokerages to suspend parts of operations or pay fines for their involvement in a major financial fraud scandal involving a now-defunct hedge fund. Once the nation's biggest hedge fund, Lime Asset Investment has been accused of selling and running fraudulent financial products and subsequently freezing fund redemption estimated at around 1.6 trillion won ($1.4 billion) in 2019.In connection with the fiasco, Shinhan Investment, KB Securities and Daishin Securities have been under probe for using fabricated information and other illicit methods to solicit customer purchases of Lime products.The Financial Services Commission (FSC) said that it has ordered Shinhan Investment and KB Securities to suspend parts of their operations for six months and Daishin Securities to close a branch.Shinhan Investment and KB Securities were fined 1.8 billion won and 609 million won, respectively, according to the FSC. The fraud scandal has roiled the nation since last year and developed into a high-profile lobbying scandal, in which former and in

Nov 12, 2021

Financial watchdog punishes 3 brokerages in Lime fund scandal

Contribution Deciphering Korea's inflation dynamics

Wanwisa May VorranikulkijBy Wanwisa May VorranikulkijConsumer price inflation in Korea had been persistently low since the 2008 global financial crisis, before picking up over the last six months. Until early this year, inflation has remained below the Bank of Korea's target rate of 2 percent despite the central bank's accommodative monetary policy stance since 2012. So, what are the factors driving Korea's inflation dynamics and how will these factors shape the country's future monetary policy direction? Key determinants A key factor that drives consumer prices in Korea is domestic demand. After the global financial crisis in 2008, domestic demand had weakened, as indicated by actual GDP running below its potential level, resulting in negative output gaps as shown the figure below. As a result, inflation had trended downwards until early this year. Demand weakened substantially in 2020 with the outbreak of the COVID-19 pandemic but has picked up in the past six months. Consumer price inflation rises to around 2 percent, reflecting strengthening consumer confidence and domestic deman

Nov 12, 2021

[Contribution] Deciphering Korea's inflation dynamics

Amex intensifies competition between Hyundai, Samsung

Seen is the American Express Platinum Card to be issued by Hyundai Card this week. Courtesy of Hyundai CardAnother battle sparked after rivalry for Costco partnership in 2018By Park Jae-hyukHyundai Card began stealing affluent American Express (Amex) Platinum Card customers here away from Samsung Card, which had served over the past decade as the exclusive Korean issuer of the premium credit card for individual users.Their latest competition was sparked three years after Hyundai Card deprived Samsung Card of its 18-year-long status as Korea's only card firm partnered with Costco Wholesale Korea.“Because both Amex and Hyundai Card pursue premium services, they are the best partners for each other. However, the two had been unable to join hands for a long time, due to the contract between Hyundai Card and Diners Club,” Hyundai Card Vice Chairman Chung Tae-young wrote on Facebook, Wednesday, disclosing the images of Amex cards to be issued by his company this week.Hyundai Card was founded in 2001 in the wake of Hyundai Motor Group's acquisition of Diners Club Korea. Although

Nov 11, 2021By Park Jae-hyuk

Amex intensifies competition between Hyundai, Samsung

Citigroup set to pay $1.5 bil. to exit Korea

Citibank Korea's headquarters in Seoul. YonhapBy Lee Min-hyungCitigroup is considering spending up to $1.5 billion (1.76 trillion won) to exit from the consumer banking business in Korea with most of the money covering severance payments.After announcing plans for the phased shutdown of its retail banking operation here, Citibank Korea is accepting applications for voluntary retirement from about 3,500 employees until Nov. 10.Citibank Korea offered to pay the highest level of retirement allowance seen so far in the domestic industry, with the lender planning to pay as much as 700 million won to each applicant.A spokesman at the lender declined to comment on how many employees have so far applied for voluntary retirement. But industry insiders expect more than half of the bank's employees have done so.Starting late last month when Citibank Korea decided to shut down its retail banking operation in phases here, unionized workers have stepped up criticism of the plan and asked management to guarantee job security. The union has accused Citibank of the “careless” shutdown of

Nov 9, 2021By Lee Min-hyung

Citigroup set to pay $1.5 bil. to exit Korea

Reporter's notebook The shrimp will end up being crushed - again

Vice Minister of Environment Hong Jeong-kee speaks during a press briefing attended by officials of trade ministry, Fair Trade Commission, National Tax Service, Korea Customs Service, National Police Agency at the ministry in Sejong, Monday. YonhapGov't measures lack self-sufficiency, foreshadowing repeat of import item shortage By Lee Kyung-min Shrimp are small and weak, especially compared to whales ― the largest animal on the planet that is far larger in size and immeasurably more powerful. No wonder Koreans have a saying: “It is shrimp that end up getting crushed in the fight between whales.” Not until now have I thought the common old saying would hit me so close to home, especially because I never thought there would come a day where I feel so deeply for the poor shrimp in a situation where there is no way out and being crushed is all it can expect. But here it is. I can't help but feel that Korea is the shrimp in the fight between China and Australia over the recent fiasco concerning the acute shortage of diesel exhaust fluid (DEF) solution, a fight in which Korea

Nov 8, 2021By Lee Kyung-min

[Reporter's notebook] The shrimp will end up being crushed - again

Ruling party set to delay cryptocurrency tax

An employee looks at monitors that show cryptocurrency prices at Coinone's customer service office in Yongsan District, Seoul. YonhapFinancial and tax authorities evading giving a clear response on crypto taxBy Anna J. ParkThe ruling Democratic Party of Korea (DPK) has confirmed its plan to delay the start of taxing cryptocurrency trading for one year, from early next year ― which was the original plan of the country's financial and tax authorities ― to 2023. Facing diminishing support from young voters, who comprise the majority of crypto investors, the DPK said Monday that its next step will be to request the financial and tax authorities to delay the implementation of the crypto tax for one more year.“Regarding the timing of the cryptocurrency taxation plan, the DPK has changed its earlier stance. The DPK is in talks with the financial and tax authorities to delay the implementation of the planned tax on cryptocurrency gains for one more year,” a senior DPK official told The Korea Times by telephone, Monday. A 20 percent tax on gains more than 2.5 million won through c

Nov 8, 2021By Anna J. Park

Ruling party set to delay cryptocurrency tax

Citibank Korea's social contribution programs drive real change

Citibank Korea leads efforts to mitigate climate change through “Change Now for Tomorrow,” a climate action partnership signed with World Wide Fund for Nature Korea (WWF-Korea). Courtesy of Citibank KoreaBy Yi Whan-wooCitibank Korea is stepping up efforts to diversify its social contribution programs based on the three principles of employee participation, long-term commitment and leading activity. The programs are designed go beyond charity and drive real change through contributions, in partnership with non-profit organizations that coordinate programs together while receiving long-term support from the bank.The bank encourages its employees to participate voluntarily in these programs in various ways, such as through donating their talents.“We are planning and implementing social contribution programs to encourage direct participation and empathy from our employees beyond just simple support and participation,” a Citibank Korea official said. “Our social contribution efforts will continue to support those in desperate need in a meaningful way so that

Nov 8, 2021

Citibank Korea's social contribution programs drive real change

Record number of bank employees to leave due to digital transformation

gettyimagesbankBy Anna J. ParkMajor commercial banks are expected to achieve record-high profits this year thanks to increasing interest rates and rising household loans. But the number of employees leaving banks is also forecast to rise to an all-time high.This paradox is a result of various factors, ranging from the accelerated digitalization of banks that has led to a cut in both the number of workers and branches, voluntary retirement and Citibank Korea's withdrawal from retail financing.Citibank Korea has been receiving applications for voluntary retirement since late last month, not only at its retail operations, but also at its corporate financing unit. The bank will receive voluntary retirement applications up until this week and more than half of its 3,400 staff are expected to apply. Full-time employees who have worked at Citibank Korea for more than three years, but have more than five years left until retirement, will receive 90 percent of their base pay multiplied by the remaining years until they turn 60. Full-time workers who have less than five years left until retire

Nov 7, 2021By Anna J. Park

Record number of bank employees to leave due to digital transformation

Hyundai Motor tightening grip on Hyundai Capital

Hyundai Card's headquarters in Seoul. Courtesy of Hyundai CardBy Park Jae-hyukHyundai Motor Group is speeding up the process of separating Hyundai Capital from Hyundai Card and Hyundai Commercial, raising speculation that Chairman Chung Euisun will strengthen his control over the auto-financing company, which was previously managed by his brother-in-law, Hyundai Card and Hyundai Commercial Vice Chairman Chung Tae-young.Last Friday, Hyundai Card and Hyundai Commercial announced that Hyundai Capital's press releases will no longer be uploaded on the former's online public relations (PR) platform. Hyundai Capital's logo was also removed from their websites.“Hyundai Capital's PR team was split off from our team, so Hyundai Capital employees, who previously handled issues regarding Hyundai Card and Hyundai Commercial, will only deal with issues related to Hyundai Capital,” a Hyundai Card spokesperson said.The comments indicated that the latest governance overhaul of Hyundai Motor Group's three financial arms has also affected their rank-and-file employees.Hyundai Capital's reg

Nov 7, 2021By Park Jae-hyuk

Hyundai Motor tightening grip on Hyundai Capital

Contribution Enhancing efficiency of public rental housing in Korea

Government asked to encourage private sector to engage in public rental housing programBy Koo Kang-moProviding a basic living environment to needy people is one of the social services of most governments. Amongst essential services is the provision of housing to marginalized people. This type of housing is identified as social housing, public housing or other terms depending on regionWhatever you call it, the goal of social housing plans is quite clear. Regardless of income level, people need shelter to maintain a stable life at an affordable cost.According to a few papers related to public housing rental schemes both domestically and globally, there seem to be a few channels that can enhance the efficiency of such plans in Korea. Among the possible solutions that can alleviate the current issues related to public rental houses, I would like to focus on two: variation of housing types, and the involvement of the private and non-profit sector.The OECD reported a status quo in social or public housing conditions in OECD members and other European countries. It is not surprising that th

Nov 6, 2021By Lee Min-hyung

Banking & Finance