[SUPER RICH] Korea’s stock billionaires

In the 21st century, what makes rich people rich is how many shares they own in a company. The power of stocks, which is the combination of corporations ― called the greatest invention of capitalism ― and compound interest ― the strongest energy in the universe, according to Einstein ― gets stronger every day as the world economy advances. In other words, having a business and a source of compound interest is one of the best and fastest ways to become a billionaire.

For instance, Bill Gates, a young man with a keen love of computers, became the richest man in the world when the value of his 49 percent stake in Microsoft Corp. soared after the company’s IPO in 1986.

The South Korean superrich have walked a similar path. Since the current Korea Composite Stock Price Index system was established more than three decades ago, the richest men in Korea have always been the largest shareholders in a company.

The Korea Herald Special Investigative Team looked into the history of the KOSPI, starting from when it reached 1,000 for the first time in May 1989, to profile the country’s richest business tycoons in chronological order.

Shinsegae and Lotte
(April 9, 2007 ― KOSPI breaks through 1,500)

The Korean stock market, which has seen a number of ups and downs in the last 10 years, went global after 2005. Companies that survived the 1997 Asian financial crisis began to show significant growth in 2007, making Korea an attractive market for investment.

Samsung Electronics recorded a market capitalization of 86 trillion won ($83.1 billion), the highest at the time. The company’s chairman Lee Kun-hee had shares worth 1.6 trillion won. However, the richest person by stock value was Hyundai Motor Group chairman Chung Mong-koo with shares of over 2 trillion won.

Meanwhile, large retailers such as Lotte and Shinsegae also entered the spotlight. Shinsegae chairman Lee Myung-hee’s shares in the company, worth 430 billion won at the end of 2002, increased to 1.6 trillion won. The shares held by the Lotte brothers reached 1.4 trillion won in value.

Hyundai Heavy
(July 25, 2007 ― KOSPI breaks through 2,000)

Within three months of the KOSPI reaching 1,500, it hit 2,000. Stock prices soared each day as liquidity flowed into the market through fund investment. Shipbuilding, steel and plant companies began to make money.

For example, the market cap of Hyundai Heavy Industries soared more than 80 percent to about 29 trillion won in July 2007 from 16 trillion won in April 2007. This rise was due to a single influential operator pouring investment in the company.

As a result, former chairman Chung Mong-joon’s shares exceeded 3.1 trillion won to make him the No. 1 shareholder in Hyundai Heavy as of 2007. 

Hyundai Motor Group
(May 2, 2011 ― KOSPI climbs to record high)

After a few years of fluctuation, the nation’s KOSPI reached a record high of 2228.96 with a market cap of 1.2 quadrillion won.

During this time, Samsung Electronics managed to raise its market cap to 137 trillion won. The Samsung chairman’s stock value stood at 8.7 trillion won from his shares worth 4.64 trillion won in the company and shares worth 4 trillion won in Samsung Life Insurance.

However, the company that stood out the most was Hyundai Motor Group. It increased its market share in the global market with its design-driven innovation, and thus its market cap soared to 56 trillion won from 18 trillion won in just two years. Hyundai Mobis had a market cap of 35 trillion won, ranking sixth among listed companies. As a result, Hyundai Motor chairman Chung Mong-koo’s shares rapidly increased in value to 4.38 trillion won.

SK Group, AmorePacific, Naver Corp.
(Sept. 19, 2014 ― KOSPI now)

While Samsung Electronics became the world’s No. 1 in smartphones and memory semiconductors with a market cap of over 175 trillion won, SK Group has also kept busy.

Since SK C&C, the de facto holding company of SK Group, was listed in 2009, SK Group chairman Chey Tae-won’s stock value has grown to 3.4 trillion won. In particular, with SK hynix, a semiconductor company acquired by Chey, having grown to become one of the top three companies in terms of market cap, his shares are expected to increase even further.

A couple of companies besides the nation’s top four conglomerates have also received attention: AmorePacific and Naver.

On the back of robust exports, AmorePacific, the country’s top cosmetics company, has been manifesting marked sales performance, and its stock value has grown in tandem. Currently, AmorePacific chairman Suh Kyung-bae holds shares worth 6.3 trillion won.

Naver Corp. chairman Lee Hae-jin’s stock value also reached 1.3 trillion won after the company’s mobile messenger Line began to garner international attention.

By Korea Herald Special Investigative Team
(hjlee0301@heraldcorp.com)

Kwon Nam-keun
Hong Seung-wan
Sung Yeon-jin
Bae Ji-sook
Yoon Hyun-jong
Min Sang-seek
Kim Hyun-il
Lee Hee-ju