Former Kakao CEO Lim Ji-hoon Files Lawsuit Worth 80 Billion KRW Against Kakao Ventures

Jihoon Lim, CEO of Kakao

[Asia Economy Reporter Kang Nahum] Former Kakao CEO Lim Ji-hoon has filed a lawsuit worth approximately 80 billion KRW against Kakao Chairman Kim Beom-su and Kakao Ventures (formerly K Cube Ventures).

According to the IT industry and legal circles on the 25th, former CEO Lim filed a lawsuit on the 21st at the Seoul Central District Court against Chairman Kim and Kakao Ventures claiming about 500 million KRW in contractual payments. However, the 501 million KRW amount stated in the complaint is the plaintiff's claim amount set by Lim’s side to initiate the lawsuit, and the actual performance bonus claimed is known to reach up to 88.7 billion KRW.

This lawsuit was triggered by Kakao Ventures notifying former CEO Lim earlier this year that they would withhold the payment of his performance bonus.

Former CEO Lim served as the inaugural CEO of K Cube Ventures, the predecessor of Kakao Ventures, in 2012 and raised and managed a venture investment private equity fund (Fund No. 1) worth 11.5 billion KRW. In January 2015, he signed a performance bonus payment agreement to receive 70% of the performance bonus (priority allocation). This agreement was later relaxed to a 44% compensation ratio after Lim moved to the position of Kakao CEO.

The Fund No. 1 acquired 1,000 pre-IPO convertible preferred shares of Dunamu for 200 million KRW the year after its establishment. Dunamu rapidly grew into a trillion-KRW scale company after launching the cryptocurrency exchange Upbit, achieving great success. Kakao Ventures also earned over 300 billion KRW in profits, and Fund No. 1 was liquidated at the end of last year.

Kakao and Kakao Ventures distributed in-kind shares worth 61.7 billion KRW received from Fund No. 1 as performance bonuses to Kakao Ventures employees at the end of last year according to the fund’s regulations. However, Lim’s performance bonus payment was withheld on the grounds that the payment agreement was not approved through the K Cube Ventures shareholders’ meeting and board of directors at the time of signing, causing procedural issues.

Kakao stated, "The payment was withheld due to procedural deficiencies confirmed as the shareholders’ meeting and board resolution were not obtained," and added, "Following notification from the Community Alignment Center (CAC), we re-examined legal and tax issues, and it is advisable to execute the payment according to the court’s future ruling on whether and to what extent the performance bonus should be paid." They conveyed this opinion to Kakao Ventures.

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