Kakao chair cleared of antitrust law violation

The Supreme Court on Thursday found Kakao Chairman Kim Beom-su not guilty of violating an antitrust law, after he was accused of omitting some of the tech giant’s affiliates to the Fair Trade Commission (FTC).

The news fueled speculation that Lee Hae-jin, the global investment officer of Naver as well as its founder, may similarly be found not guilty of the same allegations.

Kim was summarily indicted in November 2018 for failing to report five of Kakao’s affiliates to the Fair Trade Commission back in 2016. Kakao, which was obliged to disclose all of its affiliates in its transition to a conglomerate, failed to report five affiliates including game studio NPluto and blockchain company DMTC.

The court at the time charged a 100 million won ($82,600) fine, but Kim instead requested an official trial.

The first and second trials determined that prosecutors did not prove that Kim’s omissions were clearly intentional. The court added that Kim wasn’t aware of the fact that his company was violating a major antitrust law.

Based on the two rulings, the Financial Services Commission approved Kakao’s acquisition of local securities firm Baro Investment & Securities on Feb. 5.

Under Korea’s current regulations of capital markets, the largest shareholder of a financial company can’t have been convicted of a crime resulting in more than a monetary penalty in the past five years.

As a result, Kakao’s mobile payment subsidiary Kakao Pay, which had acquired 60 percent of Baro Investment & Securities last year for 30 billion won, finally won approval to become Baro’s largest shareholder early this month.

The prosecution recently launched an investigation into Lee for allegedly neglecting to report 20 of Naver’s affiliates to the FTC in 2015.

In order for Lee to be found guilty, prosecutors need to establish clear evidence that Lee intentionally withheld company data.

While Kim’s ruling Thursday might appear to bolster Lee’s case, it remains to be seen whether the omission of some affiliates wholly owned by Lee or related to Lee’s family members could be seen as unintentional.

Naver has maintained it was a simple mistake by one of its employees.

BY BAEK HEE-YOUN, JIN EUN-SOO [jin.eunsoo@joongang.co.kr]