Kakao Corporation, a leading conglomerate in South Korea, has announced plans to divest a significant portion of its subsidiaries in a strategic move aimed at mitigating "judicial risk."
This decision comes amidst ongoing legal scrutiny surrounding its Chairman, Kim Beom Soo, who currently faces stock price manipulation allegations.
According to reports from DongA Ilbo, Kakao intends to sell several subsidiaries, including Kakao Games, Kakao Entertainment, SM Entertainment, and Kakao VX.
The divestiture process commenced on July 15, and Kakao actively sought buyers for these entities.
The corporation, however, plans to retain its core assets, such as Kakao Bank, a prominent online banking service, and Kakao Piccoma, a popular Japanese webtoon platform.
The decision to sell subsidiaries follows increased legal pressure on Chairman Kim Beom Soo, who also serves as the Chairman of Kakao's Management Reform Committee.
Prosecutors have reportedly sought an arrest warrant for Chairman Kim in connection with the stock manipulation allegations.
The investigation has cast a shadow over Kakao's operations, impacting investor confidence and contributing to a decline in its stock value.
Kakao VX, a golf brokerage platform, has been in the sale process since earlier this year, while Kakao Games is expected to follow suit.
SM Entertainment and Kakao Entertainment, implicated in the legal proceedings against Chairman Kim, will be divested once the investigations are concluded.
Last year, Kakao faced allegations of manipulating stock prices during its acquisition of SM Entertainment, further exacerbating its legal woes.
The conglomerate has also been scrutinized for potential accounting violations involving Kakao Mobility, adding to regulatory challenges across its portfolio.
Despite these challenges, Kakao remains a formidable force in South Korea's technology and entertainment sectors.
HERE ARE SOME OF THE NETIZENS' REACTIONS:
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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Written by Cassidy Jones
