Corporate entertainment spending down by 28% after anti-graft act
[THE INVESTOR] The entertainment expenses of the 30 largest Korean companies decreased nearly 30 percent on-year in the fourth quarter since the enactment of the Kim Young-ran anti-graft act last September, according to corporate tracker CEO Score on May 4.
The Kim Young-ran law sets a maximum price limit for food and gifts -- 30,000 won ($26) and 50,000 won, respectively -- for public officials and journalists, among other restrictions. CEO Score surveyed the entertainment expenses of 111 local affiliates under the 30 business groups.
The survey found that among the 30 largest groups in Korea, entertainment expenses totaled roughly 21.2 billion won in the fourth quarter last year, a 28 percent decrease from a year earlier.
Along with the decline in entertainment expenses, the country’s top 30 companies also saw a 48 percent surge on average in operating profits as well as average sales growth of approximately 2.3 percent.
Kumho Asiana Group reported the largest decrease in meals and entertainment costs with a 65.4 percent fall during the cited period, followed by Lotte with a 60 percent decline, GS with a 55 percent decrease and Mirae Asset with a 50 percent fall.
On the other hand, both KT and Hyundai Motor recorded an increase in entertainment expenses after Kim Young-ran act. KT reported a 5.3 percent increase over the cited period, while Hyundai saw its expenses slightly up, with a 2.1 percent increase.
SK Group was listed as having the highest overall entertainment costs at 2.9 billion won in the fourth quarter.
By Julie Jackson/The Korea Herald (firstname.lastname@example.org)