Standard Chartered Korea is set to pay out 150 billion won ($134 million) as interim dividends to its overseas shareholders notwithstanding allegations that it is attempting to exit Korea on declining profits.

“We will be submitting to the (Standard Chartered) board of directors the plans for paying out an interim dividend within the limit of 150 billion won as a reasonable return for shareholders,” said a spokesperson for SC Korea.

Since 2005, Standard Chartered has invested 4.6 trillion won in South Korea, beginning with its acquisition of Korea First Bank. Over the years, SC’s Korean operations paid out dividends totaling 301 billion won, meaning that the shareholders were receiving only 0.7 percent of annual profit.

Local financial authorities and market observers, however, found the amount to be excessive given the bank’s falling profit. Meanwhile, there are also allegations that in total, SC Korea is planning to pay out up to 1.2 trillion won in dividends.

The Financial Supervisory Service said it is looking into the issue as the amount would be about a third of the investment that Standard Chartered made to take over Korea First Bank and a possible indication that the U.K.-based bank is planning to withdraw from Korea.

The bank strongly denies the allegations, pointing out that the 1.2 trillion won had never been confirmed or specified, and that the said documents referred to by the financial watchdog and some of the local media had been discarded years ago.

Korea, haunted by problematic takeovers in the past, has long been plagued by disputes over the presence of foreign-owned firms. Critics have said that while it is important to protect national interests, unnecessary nit-picking will only add to Korea’s reputation as a difficult market.

By Bae Hyun-jung (tellme@heraldcorp.com)