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A view of Yeouido’s financial district. (Photo = Yonhap News) |
[Alpha Biz= Paul Lee] Almost half of Korea’s major securities companies have been rated as having weak or very weak governance structures, signaling a need for significant improvement, according to this year’s ESG evaluations.
The Korea ESG Standards Institute (KCGS) assigned B or lower grades to 13 out of 29 securities firms (44.8%) in its 2024 governance assessment. KCGS uses seven levels: S, A+, A, B+, B, C, and D—with C and D indicating vulnerable or severely vulnerable governance systems.
Key Governance Ratings
B (needs improvement): Meritz Securities, Daishin, LS Securities, Bookuk, Sangsangin, Eugene Investment, Hanyang Securities (7 firms)
C (vulnerable): Mirae Asset Securities, DB Financial Investment, Yuanta Securities, Korea Asset Investment (4 firms)
D (most vulnerable): Korea Investment & Securities, YuHwa Securities (2 firms)
Notably, no securities firm received the top S or A+ ratings, and only Shinhan Investment earned an A.
Changes from Last Year
Among the top 10 securities firms:
Ratings downgraded: Mirae Asset, Korea Investment, Daishin
Upgraded: Hana Securities (from B to B+)
Mid-sized firms showed more improvement overall, with six upgrades versus two downgrades.
Why Did Large Firms Score Poorly?
A major factor was the regulatory penalties issued earlier this year. In February, the Financial Supervisory Service sanctioned nine securities firms—including Mirae Asset, Korea Investment, NH Investment, KB Securities, Hana, Kyobo, SK, Eugene, and Yuanta—for “bond rolling” practices that shifted customer losses onto other clients, imposing institutional warnings and 28.9 billion won in fines.
In addition, long-standing concerns such as vertical ownership structures among affiliates and dual roles held by CEOs and board chairs contributed to the particularly low ratings for Mirae Asset Securities and Korea Investment & Securities.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
