Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Political issues put Korea's online platform giants in trouble
SMEs and Startups Minister nominee Han Seong-sook drinks water during a parliamentary confirmation hearing at the National Assembly in Seoul, Tuesday. Yonhap
By Park Jae-hyuk
Naver's connections with president back in spotlight as Kakao embroiled in ex-first lady scandal
Korea's two leading online platform operators have recently found themselves embroiled in political controversies.
While former Naver executives being appointed to key government positions has intensified suspicions about the company's relationship with President Lee Jae Myung, Kakao is facing allegations that one of its affiliates bribed the closest aide to former first lady Kim Keon Hee to bypass sanctions imposed under the previous administration of President Yoon Suk Yeol.
At a parliamentary confirmation hearing Tuesday, the main opposition People Power Party (PPP) pressed SMEs and Startups Minister nominee Han Seong-sook on whether she was involved in Naver's 4 billion won ($2.9 million) donation to Seongnam FC in 2015, while Lee was the city's mayor. In 2018, Lee was accused of giving special favors to Naver and other companies in return for their donations to the city-owned football club.
"I was not really aware of that matter at the time, as I was serving as Naver’s services director then," said Han, who became the tech company's CEO in 2017.
The ruling Democratic Party of Korea defended Han, noting that there has been no investigation into her involvement.
However, the PPP contends that Lee rewarded Naver for its donation by naming the company’s former and current executives to high-level posts, including SMEs minister, senior presidential secretary for artificial intelligence and minister of culture, sports and tourism. The party points to sharp gains in Naver’s stock price after the nominations as further evidence for its claims.
“It has been a long time since Lee fell in love with Naver,” PPP Rep. Ahn Cheol-soo, who represents a constituency in Seongnam, wrote on social media Friday. “The trade, industry and energy minister’s job also went to an executive of Doosan, which was caught up in the same Seongnam FC scandal.”
Kakao founder Kim Beom-su, center, attends a meeting with executives at the company's office building in Seongnam, Gyeonggi Province, Nov. 20, 2023. Courtesy of Kakao
Kakao, meanwhile, is under investigation by a special counsel team examining allegations involving the former president’s wife.
On Monday, the team summoned Kakao founder Kim Beom-su and several former and current leaders of major companies to answer questions Thursday about an investment scandal linked to one of the former first lady’s aides. Following a report that Kim declined to appear citing health issues, the special counsel team said Wednesday it is coordinating with Kakao to reschedule the questioning.
The scandal centers on claims that a man surnamed Kim, who worked as a "butler" for the former first lady’s family, received 18 billion won in illegal investments in 2023 from Kakao Mobility and other firms for his car rental business, IMS. Investigators suspect the money invested in IMS may have been diverted to the former first lady as slush funds.
Given a widely held belief that Kakao's rapid expansion was fueled by support from the liberal Moon Jae-in administration between 2017 and 2022, the company's involvement in the scandal came as a surprise to many investors, prompting them to unload their shares in Kakao affiliates on Tuesday.