4.682 Trillion KRW Spent Last Year Alone
Top 5 Companies by Industry: Banks 65%, Securities 34% Entertainment Expenses
KB Kookmin Bank Employees Received Golf Entertainment Over 15 Times from Securities Firms
Rep. Kim Hyunjung: "Entertainment Expenses Must Be More Strictly Inspected"
It has been revealed that the total amount spent on entertainment expenses by the entire financial sector, including domestic banks, securities firms, and insurance companies, over the past five and a half years reached 2.4 trillion KRW.
According to the National Assembly inspection data submitted by the Financial Supervisory Service to Rep. Kim Hyun-jung of the Democratic Party (National Assembly Financial Services Committee) on the 9th, the entertainment expenses used by banks, securities, and insurance sectors from 2019 to the first half of this year were 957.8 billion KRW, 1.1349 trillion KRW, and 308.5 billion KRW, respectively.
During the same period, the top five companies in each sector accounted for 64.7% of the total entertainment expenses in the banking sector, 33.5% in securities, 27.1% in life insurance, and 67.5% in non-life insurance.
Rep. Kim stated, "Social criticism regarding moral hazard in the financial sector is growing due to recent revelations of embezzlement, improper loans, and incomplete sales," adding, "Since the financial industry fundamentally relies on customer fees as the basis for profit generation, it is necessary to strictly inspect whether entertainment expenses are being excessively or improperly used."
Earlier, the Financial Supervisory Service conducted on-site investigations in February on seven companies, including Mirae Asset Securities, Korea Investment & Securities, NH Investment & Securities, and Meritz Securities, regarding entertainment expenses in the financial sector. The investigation confirmed that a KB Kookmin Bank employee received golf entertainment more than 15 times from various securities firms from January 2021 to June last year. KB Kookmin Bank imposed a severe disciplinary action of a three-month suspension on the employee in June last year for violating the obligation to maintain integrity.
Rep. Kim emphasized, "Since entertainment expenses have been continuously increasing every year and there is room for illegal involvement, the financial authorities should not just leave it to the autonomy of individual companies but actively intervene and signal their intention to regulate and establish rules."
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