Kakao Corporation, a prominent conglomerate in South Korea, has revealed intentions to sell off a considerable portion of its subsidiaries as a strategic measure to reduce the potential impact of “legal risk.”
This choice is made as a result of the ongoing legal examination regarding its Chairman, Kim Beom Soo, who is currently being accused of manipulating stock prices.
Per sources at DongA Ilbo, Kakao has plans to divest multiple subsidiaries such as Kakao Games, Kakao Entertainment, SM Entertainment, and Kakao VX.
The process of divestiture began on July 15, and Kakao actively searched for potential buyers for these entities.
The company, on the other hand, intends to keep its essential holdings, including Kakao Bank, a well-known online banking service, and Kakao Piccoma, a highly sought-after Japanese webtoon platform.
The choice to divest from subsidiaries is a result of mounting legal scrutiny on Chairman Kim Beom Soo, who holds the position of Chairman of Kakao’s Management Reform Committee.
According to reports, prosecutors have requested an arrest warrant for Chairman Kim on suspicion of involvement in the stock manipulation accusations.
The inquiry has caused a negative impact on Kakao’s operations, resulting in a decrease in investor confidence and a decline in its stock value.
Kakao VX, a platform that brokers golf sales, has been undergoing a sale process since earlier this year. It is anticipated that Kakao Games will also undergo a similar process.
Once the investigations against Chairman Kim are concluded, both SM Entertainment and Kakao Entertainment, who are involved in the legal proceedings, will be divested.
Last year, Kakao was accused of manipulating stock prices while acquiring SM Entertainment, which only added to its existing legal troubles.
The conglomerate has faced scrutiny for possible accounting violations involving Kakao Mobility, contributing to the regulatory obstacles it is encountering throughout its portfolio.
Despite the obstacles, Kakao remains a dominant presence in both the technology and entertainment industries of South Korea.
HERE ARE A FEW RESPONSES FROM INTERNET USERS:
I think it was last year when Hybe tried to do a deal to gain control over SM Ent, then walked away after Kakao swooped in… Now SM Ent is going to be sold off again.
can HYBE buy SM for the shits and giggles? like PLEASE that would be hilarious
Well, if HYBE buys SM Min Hee Jin Will be Happy at least.
And let me guess hybe will try to buy it? It’s obsession with SM knows no boundaries
Why don’t I even care about that?? cuz this is what you get when you betray the real CEO and get along with your enemy of course you get what you sow
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