[
THE INVESTOR] Embattled game developer
Nexon’s entertainment expenses from 2004 to 2015 were more than triple that of its main rival NCsoft, according to conglomerate tracker Chaebul.com on Tuesday.
Between 2004 and 2015, financial documents from NXC -- the Jejudo Island-based holding company of Nexon Korea -- showed that the firm and its local subsidiaries spent 17.43 billion won ($15.13 million) on entertainement expenses.
The figure compares dramatically with industry competition NCsoft, which spent 4.86 billion won from 2004 to 2015.
Since 2012, Nexon has been spending more than 2 billion won a year on such expenses. For the period between 2004 and 2015, the company‘s entertainment spending averaged 1.45 billion won a year.
The year with the highest entertainment expenses was 2013, when it spent 2.89 billion won.
The proportion of these expenses to sales at Nexon was also much higher than NCsoft.
The ratio, which had stood at 0.09 percent during 2004-2005, surged to 0.4 percent from 2006 to 2008.
NCsoft’s ratio remained at 0.13-0.15 percent of sales from 2004 to 2008.
Nexon is currently caught up in a scandal involving allegations that its founder Kim Jung-ju offered gifts to senior prosecutor Jin Kyung-joon, who is one of Kim’s college buddies.
Primarily, the gifts were in the form of Nexon’s unlisted stocks.
The allegations first broke in April this year when Jin was discovered to have pocketed 12.6 billion won from selling about 800,000 Nexon Japan shares in 2015.
He had bought the shares in 2006 on loans from Nexon before it was sold to Nexon Japan to become listed on the Tokyo stock exchange in 2011.
Originally founded in Korea, Nexon is currently based in Japan and has offices located in Japan, Korea, United States and Europe.
The Nexon founder is expected to be summoned over the next few weeks. A travel ban has been issued against him.
y Kim Ji-hyun (jemmie@heraldcorp.com)