Category: Korea-Business

For anyone that owns Lotte Group stock, now may be the time to start dumping it:

Lotte Group has been dragged into the controversy over where Korea deploys the controversial U.S. anti-missile battery, after its golf course in Seongju County, North Gyeongsang Province, emerged as the most probable alternative site.

Korea’s fifth-largest family-controlled conglomerate fears its duty free stores, hotels and other businesses that cater to Chinese visitors will be adversely affected if the government decides to install a Terminal High Altitude Area Defense (THAAD) battery at the Lotte Skyhill Country Club (CC), north of downtown Seongju. Lotte officials are also worried that its businesses in China will suffer.

Lotte is unlikely to get fair value for the golf course because the government offers compensation based on the property’s appraisal value, which is much lower than the market price.

However, the conglomerate is not in a position to publicly oppose the possible THAAD deployment to one of its most profitable golf clubs because its Chairman, Shin Dong-bin, his family members and heads of Lotte units are under investigation on allegations of breach of trust, embezzlement and other irregularities. [Korea Times]

You can read more at the link, but it will be interesting to see the Chinese reaction if Lotte is forced to sell the golf resort.

If US fast food workers think they have it bad with the US minimum at $7.25 an hour look at what their counterparts in Korea get paid:

The government announced on Friday the newly raised hourly minimum wage for next year.

According to the Ministry of Employment and Labor, the government will raise the hourly minimum wage by 7.3 percent from 6,030 won ($5.43) this year to 6,470 won starting at the beginning of next year.

“We accepted formal objections starting from July 21 to Monday, and we didn’t receive any from the labor representatives,” said Kwon Chang-joon, a director at the ministry. “We did receive a petition from the Korean Federation of Micro Enterprise but decided that there is no need for further consideration after reviewing various laws and decision-making processes by the Minimum Wage Commission with labor and business sectors.”    [Joong Ang Ilbo]

You can read more at the link.

Here is the answer:

Korean workers’ annual salary rose to 32.81 million won ($28,880) on average last year, up 470,000 won, or 1.5 percent from 2014, the Federation of Korean Industries reported.

Median yearly income from wages was 25 million won, while the average yearly salary of the top-10 percent of workers reached 64.32 million won. The FKI has made its analysis of annual salary by income class by using the data of the Ministry of Employment and Labor.

According to the analysis, the annual salary of the top-20 percent of workers was 46.25 million won or more, the top-30 percent was 36.40 million won or more, the top-40 percent was 30 million won or more and the top-50 percent was 25 million won or more.

The average yearly income of regular workers at large businesses came to 65.44 million won, putting them in the top 9.5 percent of the income class. That of regular workers at small to midsize businesses was 33.63 million won, putting them in the top 34.1 percent.

The number of workers who received 100 million won or higher a year totaled 390,000, or 2.7 percent of the total number of workers, those who made 80 million to 100 million won came to 410,000 (2.8 percent), 60 to 80 million won, 960,000 (6.5 percent), 40 to 60 million won, 2.03 million (13.8 percent), 20 to 40 million won, 5.54 million (37.7 percent), and less than 20 million won, 5.35 million (36.5 percent). [Korea Times]

You can read the rest at the link, but seems like it would be tough to get by on $28,880 a year for someone living in Seoul unless they are living with relatives or in a dual income family.

This news just causes me to smirk a bit considering the anti-US beef nonsense I saw happen in 2008:

US beef imports increased significantly as South Koreans turned away from their expensive local beef hanwoo, industry data showed on July 14.

US beef imports increased by 25.7 percent from January to May this year from the same period last year, to reach 61,062 tons, according to a report by the National Agriculture Cooperative Federation, better known as NongHyup.

South Korea became the third largest beef importer in the world during the period, after Japan and Mexico.   [Korea Herald]

You can read more at the link.

The whole issue with the succession issues and now government raid of Lotte Group is playing out like a Korean television drama:

Prosecutors raided the headquarters of South Korea’s retail giant Lotte Group, as well as its six affiliates, on Friday over allegations of embezzlement and malpractice.

The Seoul Central District Prosecutors’ Office said it sent some 200 investigators to 17 places, including the group’s headquarters in central Seoul, its major affiliates and the homes of some executives.

Hotel Lotte Co., TV channel Lotte Homeshopping and its key retail unit Lotte Shopping Co. were all raided.

Prosecutors said they confiscated computer hard drives, accounting books and other documents in their asset transactions.

Travel bans have been put out for some of the company’s senior officials, according to prosecutors. Some of the executives are accused of making secret funds by exaggerating unit prices in contracts with their subcontractors.

Prosecutors also suspect the group created slush funds while making transactions between its affiliates.

“We could no longer postpone the raid as there have been tips that evidence was being destroyed,” a senior prosecutor said.

The conglomerate, which has sprawling businesses in both South Korea and Japan, has been riddled with a series of scandals from last year, including a high-profile fight between brothers for managerial control and the recent prosecutors’ probe into the group’s duty-free business unit.

Hotel Lotte Co., which has been preparing to list its shares later this month, postponed the proposed initial public offering (IPO) to next month as its senior officials have come under investigation over alleged bribery.

Prosecutors raided the hotel unit and the house of Shin Young-ja, the head of Lotte Foundation and daughter of group founder Shin Kyuk-ho, over the allegations last week.

The 74-year-old Shin and other company officials are suspected of receiving kickbacks from Jung Woon-ho, chief of the scandal-ridden cosmetics brand Nature Republic, in return for favorable space in Lotte’s duty-free shops. Both Shin and Hotel Lotte flatly denied the allegations.  [Yonhap]

You can read more at the link, but I wonder if we see Mr. Shin show up in court in a wheel chair?

If the author actually tried Paris Baguette, she'd know that their rep was stretching the truth more than Trump https://t.co/eCR1hV1S6k

— KingSejong (@KingSejong) May 5, 2016

Well it looks like it was worth President Park wearing a headscarf during her trip to Iran because she was able to sign a number of agreements that could lead to multi-billion dollar construction projects in Iran:

President Park Geun-hye said Tuesday South Korea and Iran can produce a win-win situation if they work together in infrastructure projects in the Islamic Republic.  Iran is pushing to rebuild an economy and modernize its infrastructure after the U.N. lifted sanctions in a follow-up to a landmark deal reached with the United States and five world powers over Tehran’s disputed nuclear program.

 

“I am here to pursue the path of common prosperity with old friend Iran,” Park said in a forum attended by some 450 South Korean and Iranian business executives and leaders in the Iranian capital.  On Monday, Park and her Iranian counterpart Hassan Rouhani observed the signing of nearly 20 out of 66 memorandums of understanding worth up to US$45.6 billion after their summit.  Seoul hopes the MOUs could pave the way for South Korean companies to eventually win massive infrastructure projects under way in Iran.  [Yonhap]

You can read more at the link.

Good news for Mexico because obviously the ROK leadership views their country as one worthy of seeking investment in:

More than 100 business executives plan to travel to Mexico this week along with President Park Geun-hye, officials said Monday, in an apparent effort to try to forge new business opportunities with the large North American country.

Park is set to meet with her Mexican counterpart Enrique Pena Nieto next Monday to discuss how to boost cooperation in a wide range of issues between the two countries.

The trip follows Park’s visit to Washington for the Nuclear Security Summit with U.S. President Barack Obama and other world leaders set to be held on Thursday and Friday.

A total of 108 companies, including Samsung Electronics and Hyundai Motor, plan to send their senior executives to Mexico on the occasion of Park’s visit to try to explore new business opportunities.

It marks South Korea’s largest business delegation ever to Mexico. In 2010, only a dozen business executives traveled to Mexico with then-President Lee Myung-bak.  [Korea Times]

You can read more at the link.

Here is the latest in the never ending Samsung versus Apple patent infringement case.  This likely won’t be the last you hear of the as Samsung plans to further appeal the payout amount:

Samsung Electronics Co. agreed to pay Apple Inc. the $548 million a court ordered but that doesn’t mean they’ve come to a final resolution of their long-running patent battle over smartphones.

Samsung said in a court filing Thursday that it’s only paying the money because an appeals court refused to block a judgment ordering it to pay.

The South Korean device maker said it will pursue reimbursement for at least some of the money if the U.S. Patent and Trademark Office invalidates the patents and if the U.S. Supreme Court takes up its request for review.
It’s been almost five years since Apple first accused Samsung of “slavishly” copying the iPhone, setting off a global patent battle that has shrunk in size but not in vitriol. The two tech behemoths have dropped all non-U.S. cases, leaving two main disputes that still have a way to go in court.  [Korea Herald]

You can read the rest at the link.

Models introduce the all-new Lincoln MKX, a luxury SUV manufactured by Ford Motor Co., during a publicity event in Seoul on Nov. 10, 2015. (Yonhap)