Kakao Corp., the operator of South Korea’s top mobile messenger KakaoTalk, has been included on the antitrust watchlist as a large business group, with its mutual investments and loan guarantees to be restricted. (Image : Yonhap)
SEJONG, April 4 (Korea Bizwire) – Kakao Corp., the operator of South Korea’s top mobile messenger KakaoTalk, has been included on the antitrust watch list as a large business group, with its mutual investments and loan guarantees to be restricted, the watchdog said Sunday.
The Fair Trade Commission (FTC) announces a newly updated list of large business groups with assets of 5 trillion won (US$4.37 billion) or more every year to oversee their equity investments or inter-affiliate loan guarantees.
In its latest update, the FTC added six companies and removed two from the list, raising the total number to 65.
Kakao, which has businesses ranging from a mobile chat application and online portal site to a mobile-based taxi-booking service, was listed for the first time, along with five others including Harim Co., a poultry-processing company, and Celltrion Inc., a bio-pharmaceutical firm that ranks at the top of the tech-heavy KOSDAQ bourse.
The FTC said Kakao’s total assets surpassed the 5 trillion-won level following a takeover of a music streaming and download service provider, Melon, for 1.87 trillion won in January.’
The latest data then showed the aggregate value of the 65 groups stood at 2,337 trillion won, an increase of 79 trillion won from the previous year. Seven business groups, including Samsung Group and Hyundai Motor Group, posted their respective assets of 100 trillion won or more, the FTC added.
The average debt ratio of the 65 business groups stood at 98.2 percent, down 2.9 percentage points from a year ago, with the Korea Railroad Corp.’s ratio falling the most. In term of sales, their combined volume fell some 100 trillion won to 1,404.3 trillion won, with net earnings up 12.8 trillion won to 54.9 trillion won.
Kakao showed a calm response to the FTC’s decision as the company has been busy preparing for the launch of a direct bank later this year.
“There will be no immediate impact on Kakao, despite the new regulation on cross-shareholding on the company,” a Kakao spokesman said. “We plan to focus on our businesses without any changes.”
The company added the move will also not have an impact on its planned online bank, adding it will continue to wait for legal revisions.
The government has been pushing to change relevant rules in order for non-banking holding entities to own and manage banks, but the bills are in limbo in the parliament.
Industry watchers earlier expected that once Kakao is considered a conglomerate, it will face tougher regulations on its establishment and operations of a bank.
(Yonhap)
