Kakao executive used company card for $75,000 of personal game items

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Kakao executive used company card for $75,000 of personal game items

Published: 05 Sep. 2023, 17:37 Updated: 05 Sep. 2023, 17:57

LEE JAE-LIM
lee.jaelim@joongang.co.kr

Kakao's headquarters in Pangyo, Gyeonggi [YONHAP]

A Kakao executive misappropriated 100 million won ($75,000) from his company card to purchase personal game items while the tech company is in the midst of financial difficulties.

The executive, surnamed Kim, was suspended from his work for three months for the misappropriation. The company made the internal announcement to its employees on Friday.

He will return to his current position after a three-month suspension.

Kakao is currently rolling out labor restructuring on some of its affiliates due to poor profitability.

Kim is the current head of Kakao's corporate finance but his position is more restricted compared to the chief financial officer (CFO) as he oversees the allocation of the company budget and funds rather than overall investor relations.

Kim was previously the CFO of Kakao subsidiaries Kakao Games and Kakao Commerce. He was appointed to his current position in February 2022.

An internal committee received a tip-off last month that he was using his corporate card “improperly” to purchase game items. After investigation, the allegation was discovered to be true. Kim spent 100 million won on purchasing game items from Kakao Games.

The committee judged that Kim’s conduct itself was not to be blamed, as an executive’s corporate cards could be used for content-related purchases.

“However, the spending was evaluated to have been too much,” a Kakao spokesperson said. “He was immediately suspended from his position and the spending was retrieved.”

Kakao said in an official statement that the company will “come up with a clearer set of guidelines and limits in using corporate cards.”

Meanwhile, the tech company is facing protests from unionized workers who are demanding that executives take responsibility for recent layoffs by struggling Kakao affiliates such as Kakao Enterprise, Kakao Entertainment and XL Games.

It’s also facing allegations that it manipulated the stock price of SM Entertainment, to which it acquired a 39.9 percent stake in March to become the K-pop agency’s largest shareholder. The financial authorities raided Kakao founder Kim Beom-su’s office earlier this month to probe into the matter.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]