'Foreign Retail Giant' Costco Transfers 200 Billion KRW Cash to US Headquarters

More Than Two Years' Combined Net Profit
Instead of Supporting Small Businesses at Hanam Branch Opening
Replaced by a 40 Million Won Fine
"Foreign Retail Giant, Alleged to Invade Local Markets" Criticism Also Raised

[Asia Economy Reporter Cha Min-young] Costco Korea, which has sparked controversy for ignoring policies promoting coexistence between domestic retailers and small business owners, will distribute over 200 billion KRW in cash dividends to its U.S. headquarters.

According to Costco Korea's 2019 fiscal year (September 2019 to August 2020) audit report released on the 24th, the company held a board meeting on the 4th and decided to pay a total cash dividend of 229.3 billion KRW at 86,850 KRW per share. The dividend payout ratio per share is 86.85%.

This amount exceeds the combined net profits of 105.5 billion KRW from the 2019 fiscal year and 96 billion KRW from the 2018 fiscal year, totaling 201.5 billion KRW.

The cash dividend appears to have been decided according to the policy of the U.S. headquarters. Costco Wholesale, the parent company, announced on the 16th that it would pay a special dividend of 10 USD per share. The total dividend amount is 4.4 billion USD (approximately 4.448 trillion KRW).

Since Costco Korea is 100% owned by the U.S. headquarters, all dividends from Costco Korea will be transferred to the United States.

Last April, Costco forced its entry into the Hanam branch in Gyeonggi Province without properly negotiating with local merchants. The Ministry of SMEs and Startups recommended postponing the opening under the Win-Win Growth Act, but Costco ignored this and paid a fine of 40 million KRW instead.

Costco's actions were also criticized during the 21st National Assembly audit. Shin Young-dae, a member of the Democratic Party, pointed out at the National Assembly’s Industry, Trade, Energy, SMEs and Startups Committee audit, "Foreign retail companies like Costco are becoming new giants that infringe on neighborhood markets, causing controversy."