Yahoo Finance Billionaire Kakao Founder Quits Board as Public Backlash Grows
(Bloomberg) -- Kakao Group founder Brian Kim has stepped down from the board, relinquishing the reins after a series of scandals rocked the South Korean social media and fintech giant.
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Kim, the self-made billionaire who founded the nation’s top messaging app operator Kakao Corp, will now focus on global business expansion, his company said in an emailed statement on Monday. Shares of Kakao Corp. rose as much as 3.5% in Seoul while Kakaobank Corp. climbed 2.3%.
Shares of the group’s units plunged in January following news reports police were investigating allegations that Kim evaded nearly $740 million taxes in 2014, a claim the company denied. That came on top of criticism from regulators that the Kakao group was fomenting a monopoly, as well as public outrage over the sale of stock by top executives after a unit’s successful public offering.
Read more: Chat App Tycoon Loses $7 Billion as Tax Scandal Adds to Woes
Kim’s retreat mars a sensational rise for an entrepreneur who founded his empire in 2006 and at one point overtook Samsung Group heir Jay Y. Lee to become South Korea’s richest person. The conglomerate has since expanded into a plethora of arenas from online banking and shopping to gaming.
In less than two years, three of its units went public: Kakao Games Corp., KakaoBank Corp. and Kakao Pay Corp. The latter, backed by Jack Ma’s Ant Group Co., surged more than 150% in its trading debut in November to become one of the hottest IPOs of 2021. The group is now preparing to float ride-hailing service provider Kakao Mobility, and has reportedly selected arrangers.
But the rapid growth has put Kakao under increased regulatory scrutiny, with its market dominance being criticized for threatening mom-and-pop stores. In September, Kim pledged 300 billion won to help small merchants and said it would consider scrapping services that compete with them, such as flower delivery.
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