The move comes after Kakao executives declared that the company is under emergency management earlier this week amid accusations that Kakao inflated the stock price of K-pop agency SM Entertainment Co. (image: Yonhap)
SEOUL, Nov. 3 (Korea Bizwire) – Kakao Corp., the operator of South Korea’s top mobile messenger, said Friday it will establish an independent organization to strengthen its ethics management system amid public criticism over stock manipulation allegations involving its executives.
The external body, planned for launch later this year, will be dedicated to creating and operating a compliance system, and improving the internal control system of Kakao, the company said.
The tentatively named “compliance and credibility committee” will also have the authority to supervise Kakao and its affiliates on issues it has been criticized over, including excessive listing of affiliates, violation of the fair trade act and monopolization of the market, and conduct investigations on those issues.
Kim So-young, a former Supreme Court justice, will head the committee, Kakao said.
The move comes after Kakao executives declared that the company is under emergency management earlier this week amid accusations that Kakao inflated the stock price of K-pop agency SM Entertainment Co. by investing some 240 billion won (US$181.5 million) to win a bidding war against Hybe Co., the K-pop powerhouse behind global superstar BTS, in February.
Last week, the Financial Supervisory Service (FSS) referred Kakao, Kakao Entertainment and three of the company’s senior executives, including chief investment officer Bae Jae-hyun, to prosecutors over the allegations. Bae was placed under arrest earlier this month.
Kakao founder Kim Beom-su is also suspected of involvement in the case, but the FSS has yet to refer him to the prosecution.
On Wednesday, President Yoon Suk Yeol also expressed concerns about the business practice of Kakao Mobility Corp., Kakao’s taxi-hailing business arm, particularly its tactics of using its market dominance.
“Kakao is aware that it is in a crisis where it cannot stick to its original management methods,” the Kakao founder said, adding, “We will make painstaking efforts to come up with a management system that matches the public’s standards.”
(Yonhap)
