Papers detail Standard Chartered Korea dividend transfer planThe Financial Supervisory Service (FSS) said Monday it found documents that revealed Standard Chartered Korea’s plan to transfer more than 1 trillion won ($901 billion) as dividends to its London-based headquarters by March, raising suspicions about the institution’s intent.
The FSS found the documents handed over by an insider during an ongoing inspection of the bank. The papers are proof the British bank’s Korea unit was planning to send about 1.1 trillion won to a Hong Kong-based special purpose company that would eventually transfer the money to London.
Local media reported the news two weeks ago, raising the possibility of the foreign bank’s plans to move the capital out of the country.
According to the FSS, the documents included the bank’s plan to contact Blue House and financial authority officials to lobby them in order to carry out the money transfer quietly.
The FSS found that Ajay Kanwal, the chairman and CEO of Standard Chartered Korea, has met with high-ranking government officials since April.
“The documents convey raw-level ideas, not any specific plans,” said a spokesman at the bank.
The bank has reportedly decided to send 300 billion won as dividends to the headquarters, but it is not a confirmed plan, either, the spokesman said. Since 2005, Standard Chartered invested 4.6 trillion won in the Korea branch and sent a total of 310 billion won as dividends. The last time the Korea branch offered dividends was in 2012, worth about 120 billion won.
It is not the duty of the FSS to control foreign institutions’ dividend amounts.
In principle, financial institutions can dole out dividends autonomously.
“What we are looking at is the appropriateness of institutions’ capital situations,” said Park Sea-chun, deputy governor of the FSS. “Considering the possibility of higher risks of bad debt or capital erosion, the FSS advises institutions to set reasonable amounts of dividends.”
The Korea unit of the bank has sensitive to negative media reports because it was already suffering due to rumors that Standard Chartered will pull out of the country due to falling profitability, which the bank has strongly denied.
The rumors that the bank would leave Korea gained ground after SC Korea started to reduce the number of its branches across the country, shuttering 24 last year. This year, it planned to shut down 50 more based on an agreement with its union.
BY SONG SU-HYUN [firstname.lastname@example.org]