Kakao founder Kim Beom-su, right, enters the Seoul Southern District Court in Yangcheon District to attend a court hearing, Feb. 7. Yonhap

Kim Beom-su, founder and chief of Kakao, will step down from the messaging and mobile platform giant's top decision-making council, citing health reasons, the Korean tech giant said Thursday.

According to Kakao's Corporate Alignment (CA) Council, Kim will resign as co-chair, leaving Kakao CEO Chung Shin-a as the sole chair. "Founder Kim is facing a health issue that requires intensive treatment for the time being," the council said.

The CA Council was set up in January 2024 as the group's control tower, comprising CEOs of key Kakao affiliates. It is responsible for aligning interests among group units in major business decisions and serves as an umbrella for the strategy committee, responsible management committee and several other management-related committees.

Throughout last year, the council has been setting up group-wise strategies such as trimming non-core affiliates, as well as handling legal risks surrounding the group.

Kim was arrested in July last year for allegedly attempting to manipulate the price of SM Entertainment's stock in February 2023, during Kakao's acquisition of the K-pop management agency. He was released on bail in October last year, and related investigations are ongoing.

Kim, however, will maintain his position as the head of the group's Future Initiative Center, which sets up the group's future strategies, to enable an agile decision-making process and subsequent executions.

The council also said its management overhaul committee will end operations. The committee, which was established in November 2023, was responsible for creating the framework for the group's reform. Now that the direction and system for reform have been established, the subsequent tasks will be continued by other committees, Kakao said.

While announcing Kim's resignation from the council, Kakao informed its employees that it will spin off web portal Daum as a separate company.

Kakao merged with Daum Communications in 2014 and, in 2023, restructured Daum as a company-in-company (CIC) under its management.

"We are preparing the spin-off to refurbish the content CIC," Kakao said. "By ensuring complete independence as a separate legal entity, we aim to create an environment that allows for various experiments and a fast, independent decision-making structure."

Daum was once one of the country's biggest web portals, alongside Naver, but its market presence has been weakening, with Naver and Google now dominating more than 90 percent of the country's web search market.