Tax agency launches first probe into Daum Kakao

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Tax agency launches first probe into Daum Kakao

The nation’s tax authority launched an investigation into Daum Kakao on Tuesday, the first probe since the merger between portal site Daum and mobile messenger KakaoTalk.

This is the first time in seven years that Daum has been audited by the agency. In 2008, Daum was fined 4 billion won ($3.5 million) after a two month investigation.

Both the National Tax Service and Daum Kakao did not disclose the reasons for the investigation, but its scale indicates the probe is more than a regular tax audit.

The Seoul Regional Tax Office, the capital’s branch of the nation’s regulator, sent a total of 55 investigators to the tech company’s office in Pangyo, Gyeonggi.

The investigators belong to the office’s fourth division, which is often in charge of targeting large-scale tax evasion cases, such as those involving the owners of big corporations.

The division is also known for storming into offices without notice, as they often act on whistleblowers’ revelations of tax irregularities or underhanded dealings with subsidiaries. Regular auditors notify companies 10 days before an inspection.

E-Mart is currently under investigation by the fourth division for alleged tax evasion and giving unfair advantages to its subsidiaries.

Last year, Lotte Group was also forced to pay 60 billion won in fines for tax evasion.

Daum Kakao declined to comment on the investigation.

But the founder of Daum, who is not currently involved in the management of Daum Kakao, Lee Jae-woong dismissed the investigation as a politically motivated act.

He cited other investigations that suddenly emerged when the government dealt with controversies like the Sewol sinking, implying that the probe was distracting from the Middle East respiratory syndrome crisis.

Daum merged with Kakao in May 2014.

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