Samsung Electronics’ Seocho building in Seoul (Image courtesy of Yonhap)
SEOUL, Feb. 26 (Korea Bizwire) — Stock-backed loans among South Korea’s major conglomerate owners have surged by nearly 1.5 trillion won ($1.05 billion) over the past eight months, reflecting an increasing reliance on equity as collateral amid financial pressures.
A recent analysis by corporate research firm Leaders Index, covering 79 of the nation’s largest business groups with controlling families, found that owners from 42 groups had taken out loans using their company shares as collateral as of February 20, 2025.
The total number of individuals securing loans rose to 164 from 121 in June 2024, marking an increase of 43 borrowers.
The collective loan balance reached 9.37 trillion won ($6.55 billion), up from 7.92 trillion won in mid-2024. The proportion of pledged shares climbed from 40.7% to 65.9% during the same period.
Industry analysts point to several key reasons behind this trend, including securing funds for corporate operations, inheritance tax payments, and succession planning.
While pledging shares allows owners to maintain their voting rights and managerial control, a sharp decline in stock prices could trigger forced sales, potentially destabilizing share values and jeopardizing leadership authority.
Among the most notable cases, the Yeongpoong Group recorded the largest increase in stock-backed loans in 2025. The group’s owners secured 489.5 billion won, with a collateralization rate of 86.2%. This move is largely attributed to the ongoing governance dispute over Korea Zinc.
Two other conglomerates, Taeyoung Group and Shinsegae Group, entered the upper ranks of stock-backed borrowers this year. Taeyoung Chairman Yoon Seok-min and his father, founder Yoon Se-young, jointly secured a 400 billion won loan.
Meanwhile, Shinsegae Chairman Chung Yong-jin borrowed 215.8 billion won, pledging 65% of his 7.96 million shares—believed to be linked to his acquisition of additional E-Mart stakes.
Samsung Group remains the leader in stock-backed borrowing, with a total loan balance of 3.27 trillion won ($2.28 billion). The late Chairman Lee Kun-hee’s widow, Hong Ra-hee, and their daughters, Lee Boo-jin (President of Hotel Shilla) and Lee Seo-hyun (Head of Samsung C&T’s Strategic Planning Division), have taken out substantial loans.
Hong’s stock-backed borrowing grew by 340 billion won over the past year to reach 2.12 trillion won. More than half (51.9%) of her 99.78 million Samsung Electronics shares were pledged as collateral, making her the largest individual borrower.
Meanwhile, Lee Boo-jin and Lee Seo-hyun maintained loan balances of 580 billion won and 578.2 billion won, respectively, without changes from the previous year.
As stock-backed borrowing intensifies among South Korea’s business elite, market observers warn of potential risks.
If stock values fall below collateral thresholds, forced liquidations could not only erode wealth but also destabilize corporate governance structures, further underscoring the high-stakes financial strategies at play within the nation’s largest conglomerates.
M. H. Lee (mhlee@koreabizwire.com)
