Kakao Corp. founder and chairman Kim Beom-su, has come under scrutiny by the Korean Fair Trade Commission (FTC) for alleged delinquency in mandatory reporting of the governance structure in K Cube Holdings Co., the de facto holding entity of Kakao, amid all-around state oversight on the platform empire.
The country’s antitrust watchdog investigated headquarters of Kakao and K Cube Holdings last week over Kim’s alleged violation of the fair trade law, according to industry sources on Monday.
The FTC is suspecting Kakao of underreporting or fabricating reports on K Cube Holdings over the past five years.
Large companies are required to submit mandated documents on the stake status quo of affiliates, major shareholders, and special relations of owners. The FTC can take criminal actions for incompliance or negligence.
K Cube was founded in January 2007 as a software developer under full ownership of Kim, allowing him to command over Kakao as the second largest shareholder with a 10.59 percent stake in addition to his direct holding of 13.30 percent stake in Kakao as of the end of June. Most of the seven executives of K Cube Holdings are family and relatives of Kim.
The FTC plans to bring the agenda to its full-session meeting by the end of the year following the probe to discuss whether to impose a penalty on the company.
Shares of Kakao finished Monday down 4.23 percent at 124,500 won.
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