Kakao Mobility pushes plans to reappoint CEO against FSS's wishes

Kakao Mobility CEO Ryu Geung-seon [YONHAP]

Kakao Mobility, Korea's top taxi-hailing service operator, has been pushing for plans to reappoint its CEO despite the state financial regulator's recommendation to replace him amid allegations of accounting fraud, industry sources said Tuesday.

In a general shareholders' meeting slated for next week, Kakao Mobility will carry out a vote on re-electing Ryu Geung-seon as the CEO, following the Financial Supervisory Service (FSS)'s recommendation to dismiss him over the alleged accounting fraud, according to the sources.

Kakao Mobility allegedly inflated its sales figure by receiving 20 percent of its taxi drivers' profit as a membership fee, and returning about 80 percent of the fee to the drivers.

Last month, the FSS issued a prior notice to Kakao Mobility that it will refer the company and key officials to the prosecution over the allegations and impose a 9-billion-won ($6.7 million) fine.

Additionally, the FSS also recommended Ryu step down from his position.

In apparent efforts to deflate its sales, Kakao Mobility recently amended its accounting standards, resulting in a reduction in its annual sales last year to 600 billion won from over 1 trillion won.

The company said Ryu's reappointment as the company's CEO has yet to be confirmed, but noted he has successfully led the company during his tenure.

Kakao Mobility and its parent, Kakao, have been at the center of public criticism since last year over suspicions of unfair business practices and moral hazard of their executives, including stock manipulation allegations.

Yonhap