SEOUL, Sept. 27 (Korea Bizwire) — South Korean companies’ entertainment expenses sank nearly 15 percent on-year in the first half of the year after a draconian anti-graft law came into force a year earlier, a market tracker said Wednesday.
A total of 139 large companies spent a combined 97 billion won (US$85.2 million) in the January-June period, down 15.1 percent from the same period a year earlier, according to CEO Score.
The figure covered those who ranked among the country’s top 500 businesses by revenue and disclosed their entertainment expenditures separately.
CEO Score said the law had a considerable impact as the total sales of the companies increased only 6.3 percent during the same period.
Among the surveyed firms, 102, or 73.4 percent, slashed entertainment expenses in the first half, with top pharmaceutical firm Yuhan Corp. registering the biggest decline of 81 percent.
However, the remaining 37 corporations jacked up their entertainment expenses, with Mirae Asset Capital Co. posting the highest gain of 95 percent.
The pharmaceutical industry cut their entertainment spending the most (51 percent) during the six-month period, followed by the shipbuilding, machinery and facility sectors with 38 percent and the service industry with 30 percent.
The information technology, electric and electronics sector saw its entertainment expenses climb 11.7 percent on-year, with the general trading and credit finance industries reporting gains of 11 percent and 3.6 percent, respectively.
A CEO Score official said a considerable number of large companies, including tech giant Samsung Electronics Co. and top automaker Hyundai Motor Co., didn’t disclose their entertainment expenses for the first half, indicating local large companies had spent more.
The anti-corruption law, which took effect Sept. 28 last year, bans public servants, educators and journalists from receiving free meals valued over 30,000 won ($26.3), gifts worth more than 50,000 won and congratulatory or condolence money of more than 100,000 won.
Violators face a maximum sentence of three years in jail and a fine of up to 30 million won. The anti-corruption law, which aims to root out corruption and irregularities existing in South Korean society, affects some 4 million people in the nation.