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By Kim Bo-eun
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| Former Kakao Pay CEO Ryu Young-joon / Courtesy of KakaoPay |
Ryu is the former CEO of Kakao Pay, the mobile money transfer affiliate of Kakao Group. Ryu led the successful initial public offering (IPO) of the company on Nov. 3, but sold off 90 billion won ($75.05 million) worth of Kakao Pay stocks, along with seven other executives, on Dec. 10. Ryu on his own sold 230,000 stocks at 204,017 won per share, from which he reaped 46.9 billion won in profits.
Even though Ryu withdrew his nomination, the fintech stock dropped to 146,500 won at Monday's closing, down 3.26 percent from Friday's close. Kakao Pay's stock price has been tumbling since the mass selloff in December. The company's stock closed at 208,500 won on Dec. 9 before the mass selloff began. A selloff of stocks by company management generally has a negative market impact, as it is seen by investors as a sign that the stock no longer has growth momentum.
Ryu and Kakao Pay CEO nominee Shin Won-keun apologized on Jan. 4 after the controversy escalated, but Kakao's union on Jan. 5 demanded that Ryu resign from the post, stating union members could take collective action. The union said that Ryu's stock selloff was immoral and also demotivated employees, as it also resulted in the stock's price dive. The union had sought to request the National Pension Service, holding 7.4 percent of Kakao shares, to oppose Ryu's appointment to the CEO position.
The Korea Exchange, meanwhile, began reviewing the introduction of regulations that would limit members of a company's management from exercising their stock options in newly listed companies for a certain period.
Ryu was nominated on Nov. 25 as one of the new co-CEOs of Kakao, and had been expected to assume the post after the company's general shareholders meeting in March.
Ryu, 44, joined Kakao as a developer in 2011, and was appointed Kakao Pay CEO in January 2017. He is the head of the Korea Fintech Industry Association. Ryu still holds 480,000 Kakao Pay shares.
"The company will announce the new leadership as soon as this is fixed, after undergoing internal discussions and the relevant process," Kakao stated on Monday.
"Kakao will do its utmost to offer shareholder value and restore trust in executives."
Kakao and its affiliates, such as KakaoBank, have seen their stocks on a downward trajectory lately.
Kakao closed at 96,600 won, Monday, the lowest point since the tech giant's 5-to-1 stock split in April.
KakaoBank stock price has continued to fall, while Korea's four major banking stocks rose, amid the strong performance of financial stocks.
KakaoBank's stock price dropped to 50,600 won during trading hours on Monday, the lowest price it has ever reached since being listed on the KOSPI bourse last Aug. 6. The internet bank's stock peaked at an intra-trading high of 94,400 won on Aug. 18.
Kakao stated that it will come up with guidelines for executives of newly listed affiliates exercising their stock options. The group is planning IPOs for its mobility and entertainment affiliates this year.
