Subscribe
E-Paper
 |
| Kakao Mobility's minivans are parked in Seoul in this file photo. Yonhap |
By Park Jae-hyuk
Kakao Mobility abruptly delayed the selection of an underwriter for its listing on the benchmark KOSPI market next year, amid growing concerns over the government's intensifying regulations on Kakao's overall businesses.
The designated driver and taxi hailing services provider informed securities firms late Thursday of its intention to postpone the deadline for bidding to Sept. 17 from Sept. 10, citing its willingness to be more prudent about its initial public offering (IPO).
Market observers attributed the sudden decision to the latest plunge in Kakao's share price, in the wake of the government's attempts to regulate online platform operators.
Kakao is the largest shareholder of Kakao Mobility, with a 59.03-percent stake. The drop in the parent company's stock price therefore can have a significant impact on the subsidiary's valuation.
After the government and the ruling Democratic Party of Korea announced their plans to monitor and regulate fintech platforms, in particular big tech companies, the price of Kakao's stock dropped 10 percent on Wednesday and an additional 7 percent on Thursday. One suspected reason for the fall is that the government now wants big tech and fintech companies to modify or stop the advertising of financial products through their platforms, as the process is regarded as intermediation, rather than advertising.
Kakao Pay, which plans to go public in October, is currently one of the major subjects of the new regulations, but Kakao's other subsidiaries also worry that they will face difficulties in their planned IPOs, due to the authorities' efforts to monitor and regulate the IT firm's other businesses on behalf of smaller mom-and-pop shops and services, as well as customers.
The Fair Trade Commission said Friday that it is looking into Kakao Mobility's alleged unfair practices, as taxi drivers claim that, after the company succeeded in dominating the taxi hailing service industry, it is now forcing them to pay excessive amounts of money to continue using the service.
Kakao Mobility, which posted an operating loss of 13 billion won ($11 million) last year, has failed to turn a profit since it was spun off from Kakao in 2017. Although the company recently sought to induce both drivers and passengers to pay more money to use its services, it scrapped the plan after inciting severe public criticism.
