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| Kakao founder Kim Beom-su / Courtesy of Kakao |
By Baek Byung-yeul
The founder of Korea's top mobile messenger operator Kakao is under investigation by the Fair Trade Commission (FTC) for allegedly failing to report corporate structure matters related to the company's de facto holding company K Cube Holdings, according to industry sources Monday.
The antitrust agency conducted investigations at the headquarters of Kakao and K Cube Holdings last week after finding out the internet platform company allegedly violated the fair trade act.
K Cube Holdings, wholly owned by Kim Beom-su, is an investment company. Kim, who is serving as board chairman of Kakao, exercises control over Kakao through a 13.3 percent stake he holds directly and a 10.59 percent stake held by K Cube Holdings.
The FTC is known to have conducted on-site investigations of Kakao and K Cube Holdings based on its suspicions that Kakao underreported or fabricated information about K Cube Holdings over the past five years.
Under the fair trade law here, conglomerates must submit data on the status of affiliates, shareholders and other information to the FTC every year. If there appears to be a false submission date in this process, the FTC may file a complaint.
Regarding the issue, a Kakao official said, "There's nothing to comment on."
There have been suspicions that the Kakao founder is using K Cube Holdings as a means to ensure a smooth family ownership succession, as the chairman's son and daughter are known to have worked for the company.
Kakao representatives have said K Cube Holdings is the chairman's private firm and is only relevant due to its shareholder status. However, industry views deem K Cube Holdings to be a de facto holding company for Kakao.
The FTC's move is in line with lawmakers' criticism over the market dominance of internet platform business operators, whose businesses range from cab-hailing to internet banking. "Platform operators that adjust and distort rules in a way that is favorable to them will be a subject to intensive monitoring," FTC Vice Chairperson Kim Jae-shin said during a symposium held in Seoul, Sept. 10.
