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 Bank's capital increase plan hits snag
By Kim Bo-eun
Kakao Chairman Kim Beom-su
By Kim Bo-eun
It has become uncertain whether Kakao will be able to become the majority shareholder of Kakao Bank, through an injection of capital to enable the bank to grow.
This is because last month the prosecution appealed against a lower court ruling acquitting Kakao Chairman Kim Beom-su of violating the Fair Trade Act.
Kim was on trial for failing to submit reports on Kakao's five affiliates, despite the company qualifying as a conglomerate. The lower court acquitted the Kakao chief, noting that this did not appear to be intentional as the documents were submitted shortly after the company was notified about the omission.
Kakao requested the financial authorities to review its eligibility as the majority shareholder of Kakao Bank, but will have to wait until the top court's ruling is made.
The firm, which currently owns 10 percent of Kakao Bank's shares, is seeking to increase its stake to 34 percent, the maximum non-finance companies are allowed to own after related regulations were revised and went into effect this year.
Under current regulations, entities seeking to become majority shareholders need to be clear of records of violating regulations on fair trade, finance and taxes for the past five years.
The Financial Services Commission (FSC) requested the Ministry of Government Legislation in April to review whether Kim's alleged violation of the Fair Trade Act can be considered as a Kakao violation. The review usually takes up to three months.
If the ministry concludes that Kim's violation of the regulations was his alone, this could clear the barrier for Kakao.
A Kakao Bank official said Sunday increasing capital was not an urgent matter for the bank, but it needed to do so to be able to grow the business.
K bank, the other of the two existing internet-only banks, faces the same problem. Telecommunications giant KT has sought to become the majority shareholder of K bank, but a complaint was filed against KT by the prosecution over allegations of collusion with other firms in a circuit line business project.
The FSC has halted reviewing KT's eligibility as a majority shareholder of K bank due to the ongoing investigation. The bank would have received 590 billion won in capital from KT becoming the major shareholder, but the investigation has left the bank in dire need of funding.