Kakao founder vows to reassess all businesses from ground up

Drastic reform measures likely to come out no later than early 2024

Kakao founder Kim Beom-su attends a parliamentary audit at the National Assembly in Yeouido, western Seoul, Oct. 24. (Newsis)

Kakao founder Kim Beom-su said he will review the entirety of the platform giant's services and businesses, including management personnel, from the ground up, ahead of an emergency management meeting held earlier Monday.

"(We will) aim to become a company that meets the public's standards by reassessing all of (Kakao's) services and businesses," Kim told reporters at Kakao Mobility's headquarters in Pangyo, Gyeonggi Province.

Kim, who currently serves as the head of the Future Initiative Center, added that concrete measures can be taken by the end of this year or no later than early next year.

"As the founder of Kakao, (I am) currently accepting the public criticism with a heavy heart. (I will) put best efforts into renewing Kakao, which has grown with the public's love, by complying with external mediation through the (company's) Compliance and Credibility Committee and executing rapid internal reforms," he said.

Kakao's tentatively dubbed Compliance and Credibility Committee is an independent organization launched by the company on Nov. 3 in a bid to have an outside organization oversee Kakao and its affiliates' ethics management, along with its compliance with laws.

Kakao has been holding emergency management meetings every Monday since Oct. 30, in connection with recent controversy surrounding allegations that Kakao's executives took part in artificially inflating K-pop juggernaut SM Entertainment's stock price by investing some 240 billion won ($181 million) to win a bidding battle against Hybe, the rival bidder and agency behind global sensation BTS.

Regarding the matter, in October the company's Chief Investment Officer Bae Jae-hyun was placed under arrest. Bae has denied any wrongdoing.

According to industry watchers, the fact that Kakao held its third emergency meeting at the headquarters of Kakao Mobility, operator of its taxi-hailing app Kakao T, instead of its usual venue of the Kakao headquarters, can be largely interpreted as Kim's intention to deal with President Yoon Suk Yeol's recent criticism against Kakao Mobility's alleged monopoly in the nation's taxi-hailing industry.

According to local reports, Yoon reportedly called Kakao Mobility an "extremely unethical example" of a monopoly, on Nov. 1.

"(Businesses such as Kakao Mobility) aim to get rid of their competitors by offering very low-cost services. And when they succeed in attracting enough users to dominate the market, (the business) raises its price," Yoon was quoted as saying.

"Among monopolistic acts, such an act is a very immoral act," he said, adding that the government must sanction such actions.

In February, Kakao Mobility was fined 25.7 billion won by the Fair Trade Commission for prioritizing its franchise taxis over general cabs when assigning calls, through algorithm manipulation.

In the meantime, Kakao Mobility held separate meetings with local taxi organizations later on Monday to discuss ways to improve the current calling and fee system of Kakao Taxi.

By Lee Yoon-seo(yoonseo.3348@heraldcorp.com)