Conglomerates Cut Back on Charity Donations Despite Better Profits | Be Korea-savvy

Conglomerates Cut Back on Charity Donations Despite Better Profits

(image: kobizmedia/ Korea Bizwire)

(image: kobizmedia/ Korea Bizwire)

SEOUL, Nov. 29 (Korea Bizwire)Charity donations by leading conglomerates have shrunk more than 13 percent in 2017 from last year despite business profits fattening their pockets, data showed Wednesday.

Donation cuts by Samsung Group were the most striking, according to the data provided by corporate management tracker CEO Score. Samsung Electronics reduced its contributions by 112.5 billion won (US$103.97 million) this year, down 39.8 percent.

Samsung Life Insurance nearly did away with donations this year, which amounted to 144 million won compared with 24.73 billion won last year.

Despite the cutback, Samsung Electronics still was the biggest giver so far this year, followed by the far-distant No. 2 SK Telecom, which donated 57.9 billion won.

CEO Score’s tally showed that contributions by 257 conglomerates up to end-September this year totaled 978.8 billion won, 13.4 percent less than the same period last year. The companies were selected from the top 500 firms in terms of sales that made their charity work records public.

The decrease is in contrast to an overall 38.1 increase in operational profits for the top 500 companies.

A number of high-profile enterprises, most notably Samsung affiliates, have been involved in controversial financial assistance to sports and culture projects pursued by Choi Soon-sil, a friend of former President Park Geun-hye.

Court proceedings are under way on charges that Choi abused her close ties to the ex-president to extort money from conglomerates, disguised as donations, in exchange for business favors. Park was removed from office by the Constitutional Court earlier this year due to the scandal, one of a series of suspicions she faces in court.

Tobacco manufacturer KT&G reduced its donations by 79 percent, and GS Caltex by 81.5 percent. Woori Bank also cut its charity by 39 percent.

“Contributions have fallen in large amounts due to internal and external reasons at companies,” a corporate official said. “But year-end donations are under way, including Samsung Electronics deciding to give 20.1 billion won to help the needy and pledging 3 billion won to the rehabilitation of quake-struck Pohang.”


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