[Exclusive] Under Pressure from FSC and FTC... Kakao's Kim Beom-su to Announce Direct Win-Win Plan

Beom-su Kim, Chairman of the Kakao Board of Directors

Kim Beom-su, chairman of Kakao's board of directors, is expected to announce a win-win cooperation plan as early as this week.

According to Kakao on the 13th, Chairman Kim will directly address recent moves by the political and government sectors to strengthen platform regulations and controversies surrounding Kakao's infringement on local businesses. He is expected to convey that Kakao, which has focused on innovation and business expansion so far, will humbly accept various criticisms and use this as an opportunity to reflect.

He is also known to express his commitment to win-win cooperation by involving stakeholders such as consumers and small business owners, rather than a supplier-centered platform. After Chairman Kim's announcement, each affiliate is expected to present specific win-win plans tailored to their respective business areas.

Chairman Kim is reportedly also considering raising a fund for win-win cooperation by using his personal assets again. This is because it is burdensome for Kakao, which has sales in the 4 trillion won range but operating profit of only about 450 billion won, to directly invest funds. In February, Chairman Kim announced that he would donate more than half of his wealth to solve social problems. To fulfill this, he has also established the ‘Brian Impact’ foundation. He is said to be contemplating the scale and method of personal asset contributions to raise additional funds to help small business owners and others.

Meanwhile, the Fair Trade Commission has detected allegations of Chairman Kim violating the Fair Trade Act and has initiated sanction procedures. The Fair Trade Commission has launched an on-site investigation of Kakao and its holding company, K Cube Holdings, after finding circumstances suggesting that Kim, the designated individual (head) of Kakao, a ‘publicly disclosed business group,’ omitted or falsely submitted ‘designated materials.’ Following the investigation, the Fair Trade Commission may impose fines or take other sanctions such as prosecution under the Fair Trade Act.

This Fair Trade Commission investigation appears to be targeting Chairman Kim, the head of Kakao, which is currently under the government's platform regulation scrutiny. In particular, K Cube Holdings, which Kim fully owns 100% of the shares, is effectively at the top of Kakao's governance structure. As of the end of June this year, Kim holds a total of 23.89% of Kakao shares, combining his 13.3% personal stake and 10.59% stake in K Cube Holdings. K Cube Holdings is mostly composed of Kim's family members, including Kim and his wife Hyung Mi-sun as non-executive directors, and their son Kim Sang-bin and daughter Kim Ye-bin as employees.