Successive governments have promised to rein in the power and economic hegemony
of the Korean chaebol, or conglomerates, since the Asian crisis in the late 1990s. But, little has changed to curtail the corporate dominance of Samsung, Hyundai, and other family groups that gained the patronage of Park Chung-hee who ruled the country from 1961 until 1979.
On the other hand, several chaebol bosses have spells in prison for tax avoidance, fraud or embezzlement over the years, arguably to circumvent rules limiting individual shareholders voting power to 3%. Lee Kun Hee (26), chairman of Samsung Electronics is again Korea’s richest person in FinanceAsia's 2015 Rich List.
The Samsung Group is ubiquitous, with an imperial presence across most sectors of the domestic economy as well having established an international reputation for the high quality of its electronic goods. It is a global brand and the source of vast export earnings for Korea. However, as is well-known, the shareholding structure of Samsung is complex and opaque, and the channels of cash flow between its many parts seem subterranean. Lee is unwell and is expected to be succeeded by his only son, Jay.
Chung Mong-Koo (67), boss of the other top chaebol Hyundai Motor, is the second richest man in Korea. He was jailed for three years for embezzlement in 2007, but was released after a few months because of his essential work for the country. Hyundai Motor, including Kia, is the fifth largest carmaker in the world, but its home market is now being challenged by European imports since a free-trade deal in 2011. Younger brother Chung Mong-Joon runs Hyundai Heavy Industries, Koreas main shipbuilder, and is also a billionaire.
Chey Tae-Won (88), chairman of chaebol SK C&C, is another high-profile person who has spent some time behind bars for embezzelment. However he was released in August after a presidential pardon. He continues to control the SK Group whose jewels include SK Telecom, Korea’s biggest mobile carrier and SK Energy, its largest oil refiner. Chey owns a third of SK C&C, which holds stakes in the SK companies and is the source of the bulk of his wealth. Hon Hai Precision paid Chey $377 million for a 4.9% stake in SK C&C last year.
Koo Bon-Moo (94), head of LG Group, is another chaebol boss who figures in the Rich List. The conglomerate’s activities extend across electronics, telecoms and chemicals, and Koo and his wife own about 15% of the group.
Examining dividend income to determine rich list
FinanceAsia analyses the publicly listed assets of Asia (ex-Japan)’s leading business families and aggregates the dividends paid to them through their shareholdings or to their trusts or charitable foundations.
This methodology provides a more dynamic picture of wealth in the region than can be achieved by estimates of net worth, but clearly underestimates the fortunes of individuals and families whose wealth is mainly derived from non-income earning or wholly private assets. We identify a large universe of companies with large or controlling shareholders and gather information on ownership stakes and dividend payouts based on statements made to stock exchanges, newswires and, in the first instance, declarations made in annual reports.
Some holdings are opaque because of complex cross-shareholding structures such as the Lee family’s control of
Samsung and the Keswick’s control of Jardine Matheson, so there are inevitable instances of under-reporting of some tycoon’s wealth.
This article has been corrected to reflect Chey Tae-Won's presidential pardon
