April 26, 2024

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[THE INVESTOR] A third of family members of South Korea’s major conglomerate owners have put up shares as collateral for loans from financial institutions, a market tracker said on Oct. 12.

In a report on collateral provided by 363 owner family members of the country’s top 30 conglomerates, known here as chaebol, CEO Score said that 30.3 percent, or 110 people, have offered their shares as collateral for loans as of end-September.

The value of their shares put up as collateral totals 6.4 trillion won (US$5.69 billion), or 9.5 percent of their combined shareholdings worth 67.9 trillion won. The percentage was up from 9.1 percent at the end of October last year.

In particular, approximately 51 percent of those who have offered share collateral were born after 1970, said CEO Score, which tracks corporate performance in the country.

“It is construed as suggesting that the young chaebol family members have put up their shares as collateral to raise funds for receiving gifts from their parents or business succession,” CEO Score said.

(theinvestor@heraldcorp.com)