The Minute to Read (Weekend) series provides a quick overview of significant events in Korea from the week, conveniently condensed into a one-minute read. Here’s a recap of what happened this week: Sept. 23-27.
S. Korea confronts $22.5 bn tax shortfall in economic downturn
Following last year’s record tax revenue shortfall of 56 trillion won, South Korea is preparing for another substantial deficit this year, estimated at nearly 30 trillion won (approximately $22.5 billion). On Sept 26., the Ministry of Economy and Finance released a revised tax revenue forecast, projecting that this year’s national tax revenue will total 337.7 trillion won ($55.83 billion), a decrease of 29.6 trillion won from the year-end estimate of 367.3 trillion won.
The sluggish economy last year is a key factor behind this year’s tax revenue shortfall. Due to weak corporate performance—highlighted by Samsung Electronics reporting its first loss in 52 years—corporate tax revenue is expected to reach 63.2 trillion won ($47.87 billion), falling 14.5 trillion won short of the budget forecast. Additionally, the comprehensive income tax collected from self-employed individuals, based on last year’s earnings, is expected to be 4.1 trillion won below expectations, totaling 19 trillion won ($14.39 billion). The downturn in real estate transactions is also impacting tax revenues, with capital gains tax expected to be 16.6 trillion won ($12.57 billion), which is 5.8 trillion won less than anticipated.
Korea Exchange criticized for stock choices in ‘Corporate Value-up Index’
The Korea Exchange (KRX) recently announced the 100 stocks included in the “Corporate Value-up Index,” but the selection has quickly faced criticism. Critics argue that the index has deviated from its original intent, with many of the chosen stocks considered overvalued. They contend that the selection process overly emphasized factors such as dividends and share buybacks without giving sufficient weight to the overall level of shareholder returns.
Management battle intensifies between Korea Zinc and Young Poong-MBK Partners
A fierce power struggle has erupted at Korea Zinc between Chairman Choi Yun-beom’s faction and an alliance formed by Young Poong and MBK Partners. The two sides are locked in a bitter dispute, trading lawsuits and launching public attacks against each other’s management. Young Poong, Korea Zinc’s largest shareholder, holds a 33.13% stake through Chairman Chang Hyung-jin and related parties. Although Chairman Choi Yun-beom’s faction controls a 15.65% stake, the addition of allied shares brings their total close to that of the Chang family. MBK Partners, backing Young Poong, plans to launch a tender offer to acquire 6.98% to 14.61% of Korea Zinc’s shares at 750,000 won per share by Oct 4, aiming to strip Chairman Choi of his management control. Meanwhile, Chairman Choi’s camp is exploring strategies to defend his position.
Global tobacco giant BAT to launch first synthetic nicotine e-cigarette
Global tobacco giant British American Tobacco PLC (BAT) Group is set to launch the world’s first synthetic nicotine liquid e-cigarette this November. According to industry sources, BAT’s South Korean subsidiary, BAT Rothmans, recently filed a trademark application for the synthetic nicotine brand “Nomad” through its subsidiary, Nicoventures Holdings Limited. Liquid e-cigarettes have faced criticism for promoting youth smoking and contributing to environmental pollution, leading to bans or restrictions in various countries. However, in South Korea, only products containing tobacco leaves are legally classified as cigarettes, enabling the rapid spread of synthetic nicotine products made from chemicals. The South Korean government has indicated that it will first assess the potential risks of synthetic nicotine before introducing relevant regulations. In May, health authorities commissioned a study to evaluate the possible hazards associated with synthetic nicotine.
Samsung’s TV market share declines in Europe as rivals gain ground
Samsung Electronics, the world’s leading TV manufacturer, experienced a decline in both sales and market share in Europe—the largest premium TV market globally—during the first half of this year. This downturn occurred despite a rebound in European TV demand, leaving Samsung struggling as competitors gained ground. In contrast, LG Electronics, ranked second, and China’s TCL, ranked third, both saw increases in their market shares. TCL’s growth is particularly noteworthy, as it signals the rising prominence of Chinese-made TVs, traditionally viewed as budget options, within the premium segment. LG Electronics maintained its position by diversifying its lineup of Quantum Dot (QD) LCD TVs.
According to market research firm Omdia, Samsung’s market share in the European TV market by sales fell to 33.6% in the first half of this year, a decrease of 5.4 percentage points from 39.0% during the same period last year. Meanwhile, LG Electronics’ market share rose by 1.5 percentage points to 21.1%, up from 19.6% last year, and TCL’s share grew by 1.7 percentage points, reaching 6.8% from 5.1%.
S. Korea tightens grip on deepfake sex crimes with new AI legislation
The South Korean Presidential Office announced on Sept 26. that it is considering stricter technical regulations to curb the use of AI-generated deepfakes in criminal activities. On the same day, the National Assembly passed a bill criminalizing the possession, viewing, or creation of deepfake sexual exploitation materials, even if intended for personal use. The key provision of the bill stipulates that anyone found in possession of or viewing such material, with the knowledge that it is deepfake sexual exploitation content, could face up to three years in prison.
According to the Presidential Office, potential measures include requiring watermarks on AI-generated content as part of the basic law or encouraging companies to self-regulate AI-generated materials. Additionally, plans are being developed to enable platform companies to detect and remove deepfake videos swiftly. Alongside these technical regulations, the government is also expected to impose stricter penalties related to these offenses.
ADOR rejects NewJeans’ demand to reinstate former CEO
The girl group NewJeans’ ultimatum demanding the reinstatement of former CEO Min Hee-jin has been declined. On Sept 25, ADOR announced, “The board has resolved to convene a temporary shareholders’ meeting to reappoint Min Hee-jin as an internal director, but we cannot accept her return to the CEO position.” This decision was made 14 days after the NewJeans members publicly called for Min’s return via YouTube.
On Sept 11., the group urged ADOR and its parent company, HYBE, to reinstate Min as “the head of management and group production by Sept 25.” Despite a direct meeting with ADOR’s new CEO, Kim Ju-young, on the 23rd, during which the members reiterated their request, it was ultimately turned down.
In response, ADOR stated that they had proposed a compromise to Min Hee-jin to continue overseeing the production of NewJeans for the remaining five years of their contract. This proposal included a role as an internal director with guaranteed production responsibilities rather than a full return to her previous CEO position.
One minute, that’s all it takes to know about Korea. Click here ☞ https://page.stibee.com/subscriptions/305897
