Kakao Entertainment Harshly Criticized... Union Demands Explanation for Management Failure

Protest in front of Jonggak Centropolis Building on the 8th

The Kakao labor union 'Crew Union' is holding a protest on the 8th at 12 PM near the Centropolis building in Jongno-gu, Seoul, where the Kakao Entertainment headquarters is located. Photo by Cha Min-young

"Take responsibility for management failure and implement personnel reform."

The Kakao Labor Union began a picketing protest on the 8th to expose misconduct at Kakao Entertainment and demand group-level countermeasures.

The Kakao Branch of the National Chemical, Textile, and Food Industry Labor Union (Kakao Labor Union) held the protest near the Centropolis building in Jongno-gu, Seoul at 12 PM that day. Kakao Entertainment leases and uses some floors of the Centropolis building in Jongno.

Seo Seung-wook, head of the Kakao Labor Union branch, stated, "The company has not disclosed the reasons for management failure and remains silent," emphasizing, "It is necessary to clearly reveal the issues through internal audits or investigations by external independent agencies so that such problems do not recur."

He added, "Similar problems are occurring in many affiliated companies besides Kakao Entertainment, indicating a need for structural system improvements," and said, "The internal monitoring and checks are not functioning clearly. The ability to make arbitrary decisions must be corrected to prevent repeated problems."

Kakao Entertainment is under prosecution investigation for allegations of stock price manipulation of SM Entertainment. It is accused of intentionally inflating stock prices to obstruct competitors' stock purchases. During this process, controversy arose over the high-priced acquisition of a drama production company. In July 2020, the drama production company Baram Pictures, which had a capital of 100 million KRW, was acquired for 20 billion KRW, causing a loss of 40 billion KRW (suspected breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes). The company, which had been operating at a loss for years, was purchased at a price higher than the market value and capital increased, causing damage to the company. The moral hazard of management also came under scrutiny as it was revealed that actress Yoon Jeong-hee, wife of Lee Junho, head of Kakao Entertainment’s Investment Strategy Division who led the acquisition, had invested in Baram Pictures.

On the 4th, the Kakao Labor Union began its first protest demanding a meeting with Kim Beom-su, founder of Kakao and head of the Future Initiative Center, who presides over emergency management meetings. They held placards with demands such as "Take responsibility for management failure and implement personnel reform" and "Stop self-reform and guarantee crew participation" at Kakao Agit in Bundang-gu, Seongnam-si, Gyeonggi-do. The Kakao Labor Union has been demanding investigations into management corruption and verbal abuse, as well as participation in management reform through internal statements and press releases.

The union is experiencing friction with management regarding the picketing protest. On the 6th, the union disclosed an official letter from the CEO of Kakao demanding suspension of union activities, stating "Consult on union activities in advance."

Meanwhile, Kim Beom-su plans to communicate directly with employees for the first time in 2 years and 10 months. On the 11th at 2 PM, a meeting will be held both online and offline at Kakao headquarters in Seongnam-si, Gyeonggi-do. However, this has sparked controversy over exclusion of affiliates as it is limited to headquarters employees only.

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