Korea Securities Finance Corporation. While it might be a somewhat unfamiliar name outside of Yeouido, it has made headlines due to its involvement in the so-called "butler gate." Investigators are continuing their inquiries regarding the background of the 5 billion won investment by Korea Securities Finance Corporation into a car rental company, whose major shareholder is Mr. Kim Yesung, referred to as the butler of Kim Keon-hee.
As evidenced by the various nicknames attached to Korea Securities Finance Corporation, such as the bank and financial crisis firefighter and the workplace unknown to even God (meaning it's a better job than "God's workplace"), opinions are divided even in the securities industry due to its uniqueness.
Korea Securities Finance Corporation is the only securities financing company in the country. Its core business involves managing and operating investor deposits received from securities companies or asset management companies.
Article 74 of the Capital Market Act stipulates that financial investment firms must deposit or entrust investor deposits to a securities financing company, namely Korea Securities Finance Corporation. In simpler terms, Korea Securities Finance Corporation plays a protective role to ensure that securities companies and asset management companies cannot freely use investors' money.
Typically, the fees for utilizing investor deposits that enter the stock accounts every quarter are also related to Korea Securities Finance Corporation. The corporation invests these investor deposits in safe assets, including bonds, and after making a profit, pays the deposit interest to the securities companies. The money that enters the customer accounts, after deducting the securities companies' share, is the fee for utilizing the investor deposits.
Korea Securities Finance Corporation also lends funds to financial investment firms. It takes securities companies' stocks or bonds as collateral. Securities companies primarily use Korea Securities Finance Corporation as a source for short-term financing. In the first quarter alone this year, domestic securities companies paid approximately 241.2 billion won in interest for money borrowed from Korea Securities Finance Corporation.
In addition, Korea Securities Finance Corporation buys repurchase agreements (RPs) to supply liquidity and also handles stock lending brokerage. Notably, during the 2008 global financial crisis and the COVID-19 pandemic, it acted as a relief pitcher to support market stability.
With a strong public nature, Korea Securities Finance Corporation is not only managed and supervised by the Financial Services Commission, but its asset management is also stringent. As of the end of March this year, Korea Securities Finance Corporation's capital ratio based on the Bank for International Settlements (BIS) standard was 25.1%, exceeding the domestic bank average of 15.7%. The BIS capital ratio indicates the proportion of equity to total assets weighted by risk, showing the ability to handle unexpected situations.
Korea Securities Finance Corporation also maintains a fixed bad loan ratio of about 0.01%. This means that the proportion of non-performing loans with a low recovery possibility among all loans is that small. Similarly, it is at a more stable level compared to the domestic bank average of 0.5%.
It is also a robust company. Korea Securities Finance Corporation's annual net profit on a consolidated basis has shown an upward trend from 240.9 billion won in 2022 to 276.8 billion won in 2023 and 377.7 billion won in 2024. The average salary of employees has also increased from 117 million won in 2022 to 129 million won in 2024.
Korea Securities Finance Corporation paid 950 won per share as dividends from last year's settlement of accounts. While the exact calculation is difficult due to the company's unlisted status, considering that the Korea Exchange reflects the book value of Korea Securities Finance Corporation shares at 12,491 won, the dividend yield is approximately 7.6%.
For reference, the largest shareholder of Korea Securities Finance Corporation is the Korea Exchange, holding an equity stake of 11.1%. The remaining shares are held by banks and securities firms, including Woori Bank (7.7%), Hana Bank (6.8%), and NH Investment & Securities (6.4%).
This Korea Securities Finance Corporation has come under scrutiny due to its association with the butler gate. In June 2023, Korea Securities Finance Corporation invested 5 billion won into Oasis No. 3 JD New Technology Fund. This was a larger investment than those made by large corporations and financial firms that contributed to the fund, such as HS HYOSUNG, Kakao Mobility, and Kiwoom Securities.
The Oasis No. 3 JD New Technology Fund invested most of its fund capital (18.4 billion won) in IMS Mobility. At the time of the investment, IMS Mobility was in a state of accumulated deficits and capital erosion. Thus, it was not a suitable investment for the conservatively investing Korea Securities Finance Corporation.
An executive of a securities company noted that "While it may not be a special case since Korea Securities Finance Corporation invests in project funds or venture funds, given the organization's characteristics of scrutinizing each loan carefully, it seems somewhat aggressive."
The major shareholder of IMS Mobility is Ms. Kim Yesung, who was referred to as the butler of Kim Keon-hee. The special investigation team is suspecting whether the companies that were invested through the fund made compensatory investments for some kind of solicitation.
On the 17th, the special investigation team summoned former Korea Securities Finance Corporation President Yoon Chang-ho and others for questioning. Yoon did not answer any questions from reporters asking why the investment was made at that time or whether Kim Yesung mentioned Kim Keon-hee.