Bo-eun leads the digital content team. She has covered foreign affairs, North Korea, tech, economy and gender issues at The Korea Times. She did a short stint at the South China Morning Post in Hong Kong, where she obtained a new perspective on news production and life. Small sources of joy for her are lounging in the sun, having a good latte and swimming.
Kakao gets closer to Kakao Bank's major shareholder
By Kim Bo-eun
Kakao Chairman Kim Beom-su
By Kim Bo-eun
A local court's decision to acquit Kakao's chief on charges of violating fair trade regulations has raised the likelihood of the IT company getting the green light in becoming a major shareholder of Kakao Bank.
The Seoul Central District Court on Tuesday acquitted Kakao Chairman Kim Beom-su on the charges raised against him for failing to report on five Kakao subsidiaries in 2016. The court determined the omission had not been intentional.
Kakao needs to be clear of the charges to be eligible to become a majority shareholder of Kakao Bank.
It has requested the Financial Services Commission (FSC) review its eligibility, after related regulations were revised last year to allow non-financial entities to become major shareholders of internet banks owning stakes up to 34 percent.
"With Kakao Chairman Kim Beom-su's acquittal, grounds have been established for positive views of [Korea Investment Holdings'] transfer of Kakao Bank's shares," said Lim Hee-yeon, an analyst at Shinhan Investment.
Korea Investment Holdings currently holds 50 percent of Kakao Bank's shares, while Kakao holds 10 percent.
Yet the prosecution may appeal against the ruling.
However, even if the court were to rule against Kim and if Kakao were to be fined, financial authorities could still approve Kakao as the internet bank's majority shareholder.
This is because even if the entity filing to become a major shareholder has a record of violating regulations, this can be overlooked if the violations are deemed minor.
The FSC has requested the Ministry of Government Legislation review whether a fine for violating fair trade regulations can be considered minor.
A spokeswoman of the ministry said it usually takes about three months for the ministry to reach a conclusion on a request for legislative review.
This signals that it will take at least a few months before financial authorities reach a conclusion on Kakao's eligibility to increase its stake in Kakao Bank.
In the meantime, Kakao Bank recorded its first surplus in the first quarter of this year, since the bank launched in July 2017.
It recorded 6.57 billion won in net profit between January and March, a turnaround from the previous year's 5.3 billion won deficit.
The bank said this was due to the growth in customers and earnings coming from loans.
Kakao Bank had 8.91 customers in the first quarter of this year, up 15.9 percent from the same period a year earlier.
Expectations are that the bank will post a surplus this year, after two years of deficit.
If Kakao increases its shares of Kakao Bank, this will enable the injection of funds into the bank, which will allow it to further scale up its business.