Fair Trade Commission Targets Kakao's Kim Beom-su... Investigation into 'Affiliate Reporting Omissions'

Kakao and De Facto Holding Company K Cube Holdings Under On-Site Investigation
Allegations of Omission and False Submission of 'Disclosure Target Corporate Group' Data

[Sejong=Asia Economy Reporter Kwon Haeyoung] The Fair Trade Commission has detected allegations of violation of the Fair Trade Act by Kim Beom-su, chairman of the Kakao board, and has initiated disciplinary procedures. Following the heads of financial and competition authorities publicly announcing 'platform regulations,' the government’s pressure on platform companies is expanding comprehensively as it now targets Kim, the founder and head of Kakao.

According to the Fair Trade Commission and related industries on the 13th, Kim, the designated person (head) of Kakao, a 'disclosure target business group,' is suspected of omitting or submitting false 'designated materials,' prompting an on-site investigation of Kakao and its holding company, K Cube Holdings.

The Fair Trade Commission annually collects designated materials such as affiliate, family, executive, and shareholder status from the designated person of each business group under the Fair Trade Act to designate disclosure target business groups. The commission believes there are signs that Kakao omitted or falsely reported materials related to K Cube Holdings in the designated materials submitted over the past five years. After the investigation, the Fair Trade Commission may impose sanctions such as fines or criminal referrals under the Fair Trade Act.

This investigation appears to directly target Kim, the head of Kakao, which is currently within the government’s platform regulation scope. Notably, K Cube Holdings is a company wholly owned by Kim, effectively positioned at the top of Kakao’s governance structure. As of the end of June this year, Kim holds a total of 23.89% of Kakao shares, combining his 13.3% personal stake and 10.59% stake through K Cube Holdings. K Cube Holdings is mostly composed of Kim’s family members, including his wife Hyung Miseon as a non-executive director, and his son Kim Sang-bin and daughter Kim Yebin as employees.

Meanwhile, the government has been continuously increasing pressure on big tech companies. On the 10th, Cho Sung-wook, chairman of the Fair Trade Commission, stated at a breakfast meeting with the European Chamber of Commerce in Korea (ECCK), "Concerns about platform side effects are growing," and announced that the second half’s fair trade policy direction will focus on resolving platform side effects. On the same day, Ko Seung-beom, chairman of the Financial Services Commission, emphasized the need for regulation after meeting with the heads of the five major financial holding companies, stating, "We will apply the principle of 'same function, same regulation' to big tech for the protection of financial consumers and market stability."

This content was produced with the assistance of AI translation services.