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KB Kookmin Bank New Building. (Photo=KB Kookmin Bank) |
[Alpha Biz= Reporter Kim Sangjin] According to data submitted by the Financial Supervisory Service (FSS) to Democratic Party lawmaker Kim Hyun-jung, South Korean securities firms have spent a total of KRW 1.1349 trillion in business promotion expenses—commonly referred to as entertainment expenses—between 2019 and the first half of 2023. Notably, the top five asset-rich securities firms accounted for KRW 3.8 trillion, representing 33% of the total.
During the same period, the combined business promotion spending by the broader financial sector, including banks and insurance companies, reached KRW 2.4 trillion. Among financial sectors, securities firms led the expenditure, with banks spending KRW 9.578 trillion and insurance companies KRW 3.085 trillion.
This significant spending comes in the wake of a scandal earlier this year involving allegations of golf-related entertainment. In February, the FSS conducted on-site investigations of seven securities firms, including Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, and Meritz Securities, for providing golf outings to employees of KB Kookmin Bank. The investigation revealed that a KB employee had been entertained with over 15 golf outings from securities firms between January 2021 and June 2022.
Kim Hyun-jung emphasized that these expenditures have been steadily increasing each year, potentially opening the door to illegal activities. She called on financial authorities to take more proactive measures rather than leaving oversight solely to individual firms. She suggested that regulatory measures might need to be introduced to address the issue.
The term "entertainment expenses" was renamed to "business promotion expenses" in January 2023 following the revision of the tax law in 2022. These expenses typically include meals, drinks, or gifts provided to clients as part of business activities.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
