Major conglomerates achieved record profits in the first quarter of this year but cut back drastically on their charitable donations.
The Chosun Ilbo and financial information provider FnGuide tallied the donations of the nation’s top 30 conglomerates and found that they plummeted 38.7 percent on-year during the January-March period to W254 billion, the daily said on Tuesday (US$1=W1,118).
That was a whopping 66 percent less than in the previous quarter.
One reason was that conglomerates like Samsung and SK are embroiled in the corruption scandal that brought down ex-President Park Geun-hye, who is accused of extorting billions from them in donations to two dodgy nonprofits established by her confidante Choi Soon-sil.
Samsung made charitable donations of W142.9 billion in the first quarter of 2016, but that fell 73 percent to W43.5 billion in the same period this year as de facto chief Lee Jae-yong was arrested over the scandal.
SK’s charitable donations more than halved from W96 billion to W45.2 billion. LG and Hanwha also cut back by 28 and 18 percent, and CJ by 63 percent.
But Lotte, which is also embroiled in the scandal, increased donations from W10.1 billion to W18.1 billion, and Hyundai Motor and Doosan also gave more to charity than last year.
Yet the operating profits of the top 30 conglomerates soared 21 percent in the first quarter of this year.
One source at a major conglomerate said, “We did not want our intentions to be misunderstood and took a cautious approach in donating to charity”.
But big businesses also made new rules in the wake of the scandal requiring board approval of large donations.
Another source at a major conglomerate said, “The execution of large donations became slower due to the need to obtain board approval for amounts over W1 billion, but charitable donations will probably go back to about the same level as before by the end of this year”.