Prosecutors Conduct Search and Seizure at Kakao Mobility Over Alleged Revenue Inflation Suspicion

Prosecutors have conducted a search and seizure operation on Kakao Mobility, which is suspected of 'inflating sales'.

The Financial Investigation Division 2 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Kim Suhong) announced on the morning of the 20th that they conducted search and seizure at Kakao Mobility's office in Bundang-gu, Seongnam-si, Gyeonggi-do, and at two residences of its executives and employees.

Earlier, financial authorities regarded the accounting violations related to Kakao Mobility's sales inflation as gross negligence and referred the case to the prosecution.

According to the financial authorities, Kakao Mobility is suspected of overstating sales and operating expenses in its financial statements since 2020. Kakao Mobility has accounted for the franchise commission (about 20%) received from affiliated taxis as sales, and the business partnership commission (about 17%) as operating expenses.

The Financial Supervisory Service stated that the amount recognized as sales should have been the franchise commission minus the business partnership commission (about 3%). In November last year, the Securities and Futures Commission of the Financial Services Commission judged Kakao Mobility's accounting treatment violation as gross negligence.