Kakao Corp. founder Kim Beom-soo, also known as Brian Kim, will step down as chairman of the South Korean tech giant’s top decision-making body, heralding an end to the company’s emergency management.
The resignation comes amid ongoing investigations into Kim, who was indicted by prosecutors last summer for charges of stock price manipulation related to Kakao’s takeover of K-pop powerhouse SM Entertainment Co. in early 2023.
Kakao announced that Kim will quit co-chairmanship of the company’s corporate alignment council, or CA council, because he needs to focus on taking care of his health after he was diagnosed with bladder cancer, which is in its early stage.
He and Kakao Chief Executive Chung Shina have jointly led the council, which is in charge of coordinating the strategic direction of Kakao and its subsidiaries, as co-chairpersons since February 2024.
With his resignation, Kakao’s management reform committee, headed by Kim, will be dismissed because he will also leave the committee leadership.
Kim, who stepped down as chairman of Kakao’s board of directors in 2022, returned to the company’s management in late 2023 as the head of the reform committee to rescue the startup-turned-conglomerate embroiled in multiple legal disputes, management moral hazard issues and management controversies.
After he leaves the CA council, CEO Chung will lead the council in solo chairship.
Despite his departure from the council and the reform committee, Kim will maintain his job as the head of Kakao’s Mirae Initiative Center, an organization dedicated to designing the future blueprint of Kakao Group, the company said.
Kakao shrugged off any concerns about Kakao’s control tower, saying CEO Chung has been taking control of the company-wide management and reorganization since early 2024.
Kakao shares ended down 2.2% at 43,150 won ($29.66) on Thursday.
REFORM UNDER KIM DESPITE LEGAL CHALLENGES
Since Kim returned to Kakao’s management in November 2023, he has directed group-wide reforms with more centralized leadership, focusing on changes in the corporate culture, its expansion-centered management strategy and governance.
The number of Kakao affiliates dropped to 116 in March from 147 in May 2023.
After returning to management, Kim’s reform efforts, however, have hit snags.
The founder has been in trials since he was indicted by prosecutors in early August 2024, a few weeks after he was arrested for his alleged involvement in Kakao’s stock price rigging to inflate SM Entertainment shares to win a bidding war against HYBE Co. over the control of Korea’s first-generation entertainment giant in March 2023.
Kim has flatly denied the suspicions.
In October 2023, Bae Jae-hyun, chief investment officer of Kakao and two unidentified senior investment managers were arrested under investigation into the company’s purchase of a majority stake in SM Entertainment earlier that year.
The three senior managers were alleged to have pushed SM’s share price above the tender offer price proposed by the company behind the global boy band sensation BTS.
Kim was bailed last October, but it has been challenging for him to actively take part in Kakao’s management due to continued court hearings and trials.
DAUM SPINOFF
Meanwhile, Kakao also announced on the same day a decision to spin off its internet portal service Daum, Korea’s first-generation portal that was merged under Kakao in 2014.
The company did not disclose a detailed separation plan of Daum, including its spinoff date.
Daum’s split comes as Kakao is driving artificial intelligence and its messenger service KakaoTalk as its mainstay growth drivers.
This is a part of the achievements of Kim’s emergency management direction over the past two years in line with restored innovative startup spirits, said Kakao officials.
Kakao especially bets big on Kanana, a conversational AI agent-integrated messenger app that Kakao plans to launch in the first half of this year.
The company hopes the new app can be a stepping stone to its leap in the AI sector so it can rapidly catch up to its rivals at home and abroad in an AI race.
CEO Chung is at the helm in Kakao’s new growth drive, including AI.
By Hyeon-woo Oh and Seung-Woo Lee
ohw@hankyung.com
Sookyung Seo edited this article.
