Kakao prohibits executives from selling shares after listings
Kakao is now prohibiting its executives and executives of related companies from selling shares for a certain period of time following an initial public offering.
The rule comes after it was disclosed that executives of Kakao Pay had unloaded shares a month after the company went public. No laws or rules were broken by the executives making the trades, as they were not subject to a lock-up period, but the market trashed Kakao. It is down 40 percent in the past six months.
Labor representatives heavily criticized the sales.
Under the new rule, all executives will have to hold onto the new shares for one year, and CEOs for two. The decision comes from Kakao's Corporate Alignment Center (CAC), which is charged with overseeing the operations of subsidiaries.
Kakao also said it will be reviewing its plans for the listing of subsidiaries. Kakao Bank and Kakao Pay went public last year and Kakao Games in 2020. The company has been contemplating the listing of Kakao Entertainment and Kakao Mobility this year.
Kakao has been pursuing a policy of allowing as much freedom as possible for subsidiaries, and it has come under intense criticism by the National Assembly for its dominant position in the market.
Ryu Young-joon, the CEO of Kakao Pay, and seven other executives sold 90 billion won ($75.8 million) of stock on Dec. 10, according to a Financial Supervisory Service (FSS) filing. Ryu alone sold 230,000 shares worth 46.9 billion won.
He voluntarily resigned as co-CEO-designate of Kakao after a union questioned the trade and called him out as having "no sense of morals as the head of the company."
Kakao closed at 96,700 won on Thursday, down 0.5 percent from the previous day, while Kakao Pay closed at 147,000 won, slipping by 4.9 percent compared to Wednesday.
The Kospi declined 0.35 percent.
BY YOON SO-YEON [email@example.com]