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Kakao to form autonomous committee for subsidiary oversight

Published: 31 Oct. 2023, 14:46

LEE JAE-LIM
[email protected]

Kakao founder Kim Beom-su was summoned for questioning on Oct. 23 by the financial watchdog into Kakao's alleged attempt at stock manipulation in a takeover bid of the K-pop agency SM Entertainment. [NEWS1]

Kakao plans to form an autonomous committee composed of outside directors to monitor its subsidiaries as the financial watchdog continues probing into its alleged manipulation of SM Entertainment's stocks.

The committee will ensure that the subsidiaries' management systems comply with legal requirements, according to Kakao.

Kakao founder Kim Beom-su and 20 other executives reached the decision at a meeting on Monday, which convened after a Financial Supervisory Service (FSS) investigation into the company sparked a red alert.

“Overall, we need deliberation about what Kakao aims to do and carry that out in practice,” Kim said.

The FSS recently summoned Kim for questioning over allegations that Kakao artificially injected 240 billion won into the market to drive the price of SM Entertainment's shares higher than those of its competitor HYBE.

Kakao’s Chief Investment Officer Bae Jae-hyun is currently in custody for alleged violations of capital market laws.

Kakao says it is also considering receiving evaluations from external when it starts new businesses or makes large-scale investments.

Nothing has been set in stone as of yet, but the company said that the executives will continue to hold meetings every Monday to come up with a transparent management system.

BY LEE JAE-LIM [[email protected]]