More than $2 billion has come to S. Korean stock market via overseas tax havens  

Posted on : 2016-04-08 17:14 KST Modified on : 2019-10-19 20:29 KST
Figures come from Chaebul.com analysis of foreign investors with stakes of 5% or more in companies listed in S. Korea
Newstapa President Kim Yong-jin (right) speaks about the first list of South Korean implicated in the Panama papers
Newstapa President Kim Yong-jin (right) speaks about the first list of South Korean implicated in the Panama papers

As much as US$2.3 billion in foreign funds has entered the South Korean stock market by way of tax havens like the Virgin Islands and Bermuda, a recent study shows.

The website Chaebul.com announced findings on Apr. 7 from an analysis of the addresses of foreign investors holding stakes of 5% or more in companies listed on the South Korean stock market. Based on closing prices as of Apr. 5, the results showed total funds invested from tax havens amounting to 2.7017 trillion won (US$2.3 billion).

The Virgin Islands, considered one of the world‘s main tax havens, accounted for 1.0092 trillion won (US$869.4 million) of funds, ranking it eighth among source countries for foreign investment. Totals also included 669.8 billion won (US$577.0 million) from Bermuda, 591.6 billion won (US$509.6 million) from the Cayman Islands, 242.2 billion won (US$208.6 million) from Switzerland, 80.1 billion won (US$69.0 million) from the Bahamas, 68.6 billion won (US$59.1 million) from Malta, 29 billion won (US$25 million) from the Isle of Man, and 11.2 billion won (US$9.6 million) from the Marshall Islands.

In all, tax havens accounted for 6% of the 44.6244 trillion won (US$38.4 billion) in total investment by foreigners owning a 5% or more stake in listed South Korean companies.

Finance and investment industry insiders noted the possibility that some of the foreign funds could be from South Koreans concealing their ownership of shares or using paper companies set up in tax havens to avoid taxes on their investments.

On Apr. 4, the International Consortium of Investigative Journalists released an analysis of tax haven data leaked from Mossack Fonseca, Panama’s biggest law firm. An examination of the data by the investigative website Newstapa found at least 195 South Koreans on the list.

By Kim Hyo-jin, staff reporter

Please direct questions or comments to [english@hani.co.kr]

 

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