Read Novel Full Chapter 911 - Dividend (1) – Part 2
Chapter 911: Dividend (1) – Part 2
Later that day when it was almost evening, Gun-Ho received a call from SH Investment Partners’ President Geun-Soo Son.
“We completed selling all of our 3.2 shares as of today, sir. But, now someone seems to be raising the price again.”
“It’s fine. We sold all of ours already, and we are done. Let others play with it. So, what’s the average price that we sold our shares at?”
“It’s 58,000 won per share, sir.”
“So, since we sold 3.2 billion won, we now have 185.6 billion won?”
“No, sir. Do you remember when we repeatedly bought and sold 500,000 shares? We made some more profits from those transactions. The balance that we can take out right now in cash is 188.6 billion won, sir.”
“Hmm, is that right?”
‘Last time, I made 132.8 billion won through SH Investment Partners as Dyeon Korea’s stock was classified as a theme stock. At that time, I moved that fund to Seung-Hee sister’s stock account, leaving only 100 million won in SH Investment Partners’ business bank account. So, I had 132.7 billion won in Seung-Hee sister’s stock account. And then, I sent 80 billion won to President Geun-Soo Son out of 132.7 billion won, in order to buy 3.2 Dyeon Korea’s shares at about 25,000 won per share. So, I have 52.7 billion won left.
Now, I have an additional money of 188.6 billion won. If I combine that with 52.7 billion won, I have 241.3 billion won in total.
As far as tax is concerned, there is really nothing that I can claim as expenses to get deductions, so I guess that I will have to pay corporate tax at the rate of 22% for this entire amount. Hmm. The tax itself would be 53 billion won. Maybe this is why the workers in the finance sector get a relatively high salary since they will have nothing much to claim to get deductions.’
Gun-Ho closed his eyes and thought about the amount of entire money that he was currently holding personally.
‘I have 160 billion won in my stock account with Gangnam Stock Brokerage Firm. There were initially 180 billion won, but I used some of them to make an investment in China and in the stock market, so I have 160 billion won there right now. If I add the money that I made via SH Investment Partners and also the dividend that I will receive from GH Mobile for the sales proceeds of Dyeon Korea’s ownership interest, my personal cash asset would be at least 500 billion won.
500 billion won is not enough. My goal is 1 trillion won of personal cash, in addition to my company. I came halfway now with 500 billion won.’
Gun-Ho was still on the phone with President Geun-Soo Son. Gun-Ho asked him, “Closing this year at the end of December, we will have to pay a lot of tax, right?”
“I believe so, sir. I don’t see anything really to claim as expenses for tax deductions.”
“Well, for now, get an external audit to close this year’s accounting. We won’t make any more investment until the end of December. So, we are closing this year’s business as of the end of December.”
“Yes, sir.”
“And, I want you to take a break for the rest of the month. You have done a lot of work to trade 3.2 million shares. You must feel exhausted by now.”
“Haha, thank you, sir.”
The following day, Gun-Ho went to work in GH Mobile.
As soon as he arrived at his office, he called for President Song.
“I told you to vacate my office. How come I’m still seeing everything in the same way when I left here last time?”
“We want to leave it as it is until the end of this year, sir.”
“Alright. Then leave it until then. You can use my office, President Song, you know that, right?”
“Yes, sir.”
“After we receive the external audit document, we will pay corporate tax, and then we will distribute dividends.”
“Are we not paying for the company’s debt this year, sir?”
“Let’s distribute dividends first, and then we will review the option to pay the company’s debt with the remaining fund. We also need to set aside the required reserve. Considering that, what do you think about distributing 10 billion won this year?”
“Well, sir. That should be decided by you—Mr. Chairman. You are GH Mobile’s major shareholder after all.”
“You can still tell me what you think.”
“I think 10 billion won sounds good.”
“The thing is that we already received the full amount of the payment from W Chemicals for the acquisition proceeds of Dyeon Korea’s ownership interest.”
“Huh? We already received the full sales proceeds, sir?”
“Yes, we received 272 billion won.”
“Oh, I see. I saw the sales price from the public announcement online.”
“Since we received the sales proceeds of 272 billion won before December 30th this year, we need to include it in this year’s accounting.”
“Of course, sir.”
“Since we made that money by transferring stock, we need to pay transfer tax for the amount. Since the period of possession of the ownership interest was short, the tax will be high.”
“I suppose so.”
“Say, the transfer tax rate for us would be 30%. Then, we will have to pay more than 80 billion won as tax. After subtracting that amount from 272 billion won, we will be left with only 190 billion won.”
“That sounds correct, sir.”
“And, it will be considered as an extraordinary gain, and we will have to pay corporate tax as well. In the end, we will be probably left with only 150 billion won.”
“Wow, that’s a lot of tax, indeed.”
“What do you think? Do you think we should distribute this 150 billion won as dividends as well?”
“Huh? Dividends, sir? Well, umm… That’s up to you, sir.”
“If we distribute 150 billion won, you will receive 4.5 billion won as your dividend since you have 3% ownership interest, Mr. President Song.”
As he heard that he would receive 4.5 billion won as his dividend with his ownership interest of 3% in GH Mobile, President Song was startled.
“No, sir. It shouldn’t be like that. I can’t take that dividend, sir. I deserve only a dividend that comes from the profits that this company made with its business activities. I don’t deserve a dividend from investment returns. I played no part there, sir.”
“You are legally entitled to that sort of dividend too. That dividend will be sent to your personal bank account, President Song.”
“Even if I receive that money in my personal bank account, I will have to send it back to you, Mr. Chairman. I made no contribution to the investment in Dyeon Korea. I didn’t do anything to earn that investment return. That’s the earnings from the investment that you solely made with your sole effort, sir.”
“Hmm.”
“I would still feel that I’m receiving more than I deserve if I receive my dividend of 300 million won as a result of distributing GH Mobile’s profits of 10 billion won out of its total profits of 13.3 billion won. Me receiving 4.5 billion won as this year’s dividend is ridiculous, sir.”
“Then, do you think that I should leave the sales proceeds of Dyeon Korea in GH Mobile’s reserve, and later, we can use it to acquire another company through M&A or something?”
“I think you should still distribute that sales proceeds as dividends. It’s the money that was made through investment, not through business activities. If the workers find out that there is that much money in the company’s reserve, they will demand some benefits asserting the importance of their wellbeing. You should distribute it as dividends this time.”
“Hmm.”
“The timing is good. If you don’t distribute it now, it will be hard to do it later.”
“The thing is that the taxes that we have to pay is too high.”
“I have an idea.”
“You have an idea?”