Prosecutors Clear Kim Beom-su's Company K Cube of 'Geumsan Separation Violation'

Kim Beom-su, the founder of Kakao, who holds 100% of the shares in K-Cube Holdings, was found not guilty by the prosecution regarding the Fair Trade Commission's accusation that the company violated the separation of banking and commerce regulations.

According to the legal community on the 21st, the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Yong Seong-jin) recently dismissed the charges against K-Cube Holdings for violating the Fair Trade Act.

The Supreme Court's final ruling that the Fair Trade Commission's corrective order was unlawful and should be canceled appears to have influenced the prosecution's conclusion.

In December 2022, the Fair Trade Commission issued a corrective order and reported to the prosecution that K-Cube Holdings, part of the Kakao corporate group, violated the separation of banking and commerce regulations under the Fair Trade Act, which generally prohibits financial and insurance companies belonging to large business groups (with assets over 10 trillion won) from exercising voting rights over domestic affiliates' shares.

K-Cube Holdings was said to have exercised voting rights over shares held in Kakao and Kakao Games in violation of the regulations, despite being classified as a financial company because over 95% of its total revenue came from financial income.

In response, K-Cube Holdings filed a lawsuit against the Fair Trade Commission, arguing that it exercised voting rights based on the judgment that it was not a financial company.

At the end of last year, the Seoul High Court ruled in favor of K-Cube Holdings, stating that companies like K-Cube Holdings, which operate only with their own funds to generate financial income, are not subject to the separation of banking and commerce regulations, and this ruling was confirmed by the Supreme Court.