Kakao Expos? Battle... Hong Euntaek Steps Up to Resolve Internal Conflict

Kim Jeong-ho General SNS Kakao Internal Allegations Exposed
Management "Not True" Rebuttal
Union "Lost Self-Regulation Ability, Management Must Be Reformed"

Kakao Pangyo Agit, Seongnam, Gyeonggi. Photo by Jinhyung Kang aymsdream@

Kakao is experiencing internal turmoil due to a social media (SNS) ‘internal expos?’ by Kim Jeong-ho, CA Council’s Head of Management Support. In response, the labor union has urged that Kakao has lost its ability to self-regulate and called for a thorough external investigation into the management’s alleged misconduct. As the conflict deepened, Hong Eun-taek, Kakao’s CEO, spoke out for the first time to address the situation.

On November 30, CEO Hong Eun-taek announced to employees, "We have formed an investigation team centered on the Community Compliance Management Office and a law firm to audit the construction processes of the Ansan Data Center, Seoul Arena, Jeju ESG Center, and other allegations raised by Head Kim Jeong-ho." This was the company’s first official response to Kim’s criticism of internal issues through five Facebook posts over two days starting November 28.

Regarding the issue of expensive corporate golf club memberships raised by Kim, CEO Hong stated, "The sale process has already begun," and added, "The recovered funds will be used to expand recreational facilities and improve the welfare of our crews, and we have prepared and implemented improvements to external cooperation expenses."

He also announced plans to request an external investigation into Kim’s controversial use of abusive language. CEO Hong said, "Although it is difficult to disclose publicly under the Ethics Committee regulations, the Ethics Committee has recommended requesting an external law firm to investigate the matter to ensure fairness and objectivity regarding the ongoing controversy within the company, and we have accepted this. The final judgment will be made by the Ethics Committee."

He further requested, "Please wait until the investigation results are released, and refrain from making assumptions or comments about the audit or investigation outcomes in the meantime." This was interpreted as a response to Kim’s SNS expos? campaign.

Hong Eun-taek, CEO of Kakao
[Photo by Yonhap News]

Earlier, Head Kim, who is in charge of internal audits, became embroiled in controversy after it was revealed on the 22nd that he had used abusive language and verbal abuse during a work report session. In response, he posted on his SNS an explanation stating that he was angered by an executive’s decision to change a contractor for a Jeju Island idle land construction project without approval or agreement, which led to the abusive language incident. In addition, he exposed internal issues such as corporate golf memberships and corruption related to IDC and performance venues, turning Kakao upside down.

Kim is a figure personally recruited by Kakao founder Kim Beom-su, Head of the Future Initiative Center, in September to spearhead Kakao’s reform efforts and is the only internal member of the external compliance oversight body, the ‘Compliance and Trust Committee.’

However, Kakao’s management has strongly denied Kim’s claims as untrue. The day before, Oh, Vice President of the Asset Development Office overseeing Kakao’s real estate development, along with 11 employees, posted a lengthy joint statement on Kakao’s internal network, refuting Kim’s claims about the development of Kakao’s headquarters idle land within Jeju JDC, stating, "This matter proceeded with all approvals from management, including CEO Bae Jae-hyun."

As Kim’s SNS expos? escalated into a mudslinging battle among executives, the Kakao labor union also joined in. They demanded that the independent Compliance and Trust Committee investigate the management’s preferential treatment and misconduct and that the results be disclosed to employees.

The Kakao branch of the National Chemical, Textile, and Food Industry Labor Union emphasized in a notice to employees on the 29th, "It is no longer possible to resolve issues internally with the current management, and personnel reform of the management is inevitable."

They also stated, "We have continuously requested that employees participate in the Management Reform Committee alongside management, but have received no response. We have never shared meeting contents or agendas with the crews. The Management Reform Committee must no longer operate in a closed manner," demanding employee participation in the committee.