Kakao to stick with plan to sell off mobility spinoff shares

A Kakao T taxi [YONHAP]

Kakao will stick with its plan to sell some of its shares in Kakao Mobility, intensifying tensions with its union and employees.

Kakao, which holds a 57.5 percent share of Kakao Mobility, held an online conference with the mobility company’s employees on Monday to discuss the possible sale of the company's shares to a private equity firm.

“There has been a lot of criticism from outside over why Kakao, a messenger service company, is running businesses related to taxis, designated driving and parking services,” said Kakao Chairman Kim Sung-soo during the conference.

“It is not an easy choice for Kakao to forgo its control over the company, but it’s necessary for the growth of Kakao Mobility.”

The conference between the parent company and Kakao Mobility employees was the first of its kind since Kakao Mobility CEO Ryu Gung-seon made it known that there had been a discussion over selling the company during Kakao Mobility’s internal conference on June 17.

Kakao said on an electric disclosure released on July 7 that it is considering selling about 10 to 19 percent of Kakao Mobility to become the second largest shareholder, partially denying local media reports saying that Kakao has been in discussion with MBK Partners, a private equity firm, to sell 40 percent of Kakao Mobility.

Kakao said that nothing has been decided regarding which company would buy the stocks or who would become the largest shareholder. Kakao Mobility shareholders include the TPG consortium with a 29.0 percent share, Carlyle Group with 6.2 percent and LG Corp. with 2.5 percent.

“Details on the sale of Kakao Mobility have not been decided yet,” said Kakao chief investment officer Bae Jae-hyun. “We are discussing the matter with a company willing to buy the stocks, and we will be able to share details on the progress next month.”

Kakao Mobility and other Kakao-related companies have faced complaints of potentially overcharging consumers and service providers, leveraging overwhelming dominance.

“I think it’s a witch hunt to attack Kakao just for doing its business, which was considered socially acceptable in the cases of Naver and Baedal Minjok,” said Ryu at the Monday event.

The labor union criticized the management for failing to fulfill its social responsibilities.

“Kakao is misjudging the situation,” said Seo Seung-wook, who represents the unionized workers of Kakao. “Kakao was not hunted down because it’s Kakao, but because the management lacked responsibility as a platform company.”

Over 75 percent of Kakao Mobility employees and a total of 1,600 employees from other Kakao affiliates signed a petition against the company stock sale, according to the union.

The union plans to participate in a rally against the company's sale to MBK Partners on July 25.

Kakao Mobility began its taxi-hailing service in 2015 and spun off from Kakao in 2017. Kakao Mobility branched out into a wide variety of mobility-related services, from car rental services to the parcel delivery business. The original plan of the company was to go public sometime this year, but the company has faced difficulty due to the weak market and negative sentiment around Kakao and related companies.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]