Kakao's Center Director, Kim Beom-Soo, attended a hearing at the Financial Services Commission on the 23^rd (Oct.). This hearing stems from allegations of market manipulation (violating the Capital Markets Act) during a heated battle with Hive over acquiring SM Entertainment in February.

The specific allegations revolve around ‘Won Asia Partners’ entity stockpiling SM shares, driving up the share price. Given Kakao closely associated with Won Asia, this connection has raised suspicions of Kakao’s involvement. (Plus, allegations include not reporting their 5% stake in SM Entertainment.)

In terms of management performance, Kakao's third-quarter performance for this year is expected to decline by 17% compared to the previous year. also, the company faces moral dilemmas, including allegations of tech(idea) theft involving a subsidiary.

In terms of responsible management, the Financial Supervisory Service is investigating allegations of fraudulent accounting, which accounted for Kakao Mobility more than before. Also, another executive made payments exceeding $75,000 through a corporate card for in-game items.

If Mr. Kim is convicted in this case according to regulations, the individuals must hold 10% or lower of stocks (10% instead of the current 27%), which means that the “new major stockholder” will have significant influence over Kakao Bank.

Center Director Kim Beom-Soo will play an enhanced role as the "control tower". A CA council (a 4-member centralized body responsible for reconciling organizational risk management and business strategy) will be introduced, enabling comprehensive risk assessment and decision-making.

The crucial point to watch is the outcome of the investigation into Kim Beom-Soo's possible criminal charges, as it could mean a situation involving Kakao Bank and a partial stock sale.

L.L.F reporter Do-young Lee