Kakao's new tech chief faces backlash over stock sales

2024. 3. 5. 14:19
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Kakao CTO nominee Jung Gue-don (Kakao Bank)

Jung Gue-don, the former chief technology officer of Kakao Bank, has recently been nominated as the tech chief of Kakao, the Internet giant and the online-only lender's largest shareholder, according to industry sources on Tuesday.

The new appointment, however, is facing a backlash, as Jung had come under fire for selling off some 7.6 billion won ($5.7 million) of stocks in Kakao Bank for a quick profit.

He dumped 90 percent of his shares just three days after the lender’s market debut in August 2021. He sold 106,000 shares at 62,336 won each, raking in some 6.6 billion won in profits. Two weeks later, he disposed of the remaining 11,234 shares at 91,636 won each.

Along with several other Kakao executives who also dumped company shares, including Kakao Bank CEO Yoon Ho-young and former Kakao Pay CEO Ryu Young-joon, Jung's exercise of the stock option was slammed by the minority shareholders for as a betrayal of his commitment to shareholder values.

After peaking at 94,000 won following Jung’s disposals, Kakao Bank shares slipped steadily, finally bottoming out at 15,800 in October 2022, and have lately been traded at around 25,000 won.

Critics are also questioning Jung’s appointment as it comes after Kakao’s CEO nominee Chung Shin-a pledged a drastic reform in the tech giant’s management that is still reeling from a corruption scandal involving its top executives. Chung’s appointment is set to be approved at a board meeting later this month.

A Kakao official said that Jung was tapped as the tech chief for his expertise in building the technological foundation of financial operations as well as his understanding of Kakao's complex services and systems.

Jung previously served as the CTO of Daum Communications and, following the firm's merger with Kakao in 2014, worked as the head of platform technology at Kakao. In 2016, he joined Kakao Bank where he established the foundation of the internet-only bank and served as the CTO until last February.

By Choi Ji-won(jwc@heraldcorp.com)

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