SEOUL, July 14 South Korea is studying ways to
help funnel more of the growing cash reserves held by domestic
companies into the broader economy, a finance ministry official
said on Monday, without elaborating.
Kim Chul-ju, head of the finance ministry's economic policy
bureau, said by telephone the government has been "looking at
the issue" but has not reached any conclusion on any detail,
such as whether, what and when to introduce new rules.
Public broadcaster KBS TV reported on Monday the government
was considering imposing punitive taxes on companies holding
excessive cash while providing tax or financial advantages to
those sharing more of their profit with employees.
KBS TV did not disclose any source but added the finance
ministry plans to announce the result of the study later this
month at the earliest, when the ministry is due to release
revised economic policy goals for this year.
Companies hold some of their earnings for emergency use but
there has been criticism especially among politicians that South
Korean companies were holding too much cash internally instead
of sharing profit with shareholders or employees.
A private corporate news website called The CEOScoreDaily
estimated cash reserves kept by
the country's top 10 business conglomerates at 476.7 trillion
won ($468.36 billion) as of the end of June last year.
It said the figures were for the 82 non-financial affiliates
of the conglomerates listed on the local stock market.
It estimated the Samsung Group's 13 affiliates, including
smartphone maker Samsung Electronics Co Ltd, held
162.1 trillion won of retained reserves, followed by Hyundai
Motor Co group with 109.6 trillion won.
This was compared to the country's annual government budget
spending plans totalling 309.7 trillion won for this year or
annual private-sector capital investment totalling 111.6
trillion won as of 2013, official figures show.
The central bank trimmed its forecast for 2014 economic
growth last week to 3.8 percent this year from 4.0 percent,
though that it still substantially higher than last year's
actual 3.0 percent growth. Domestic demand and exports have both
($1 = 1017.8000 Korean Won)
(Reporting by Choonsik Yoo)