Chairman apologizes over Kakao's abuses

Kakao founder and chairman Kim Beom-su apologized for his firm's abuse of its monopoly status in threatening small business owners and promised to address the matter urgently.

Kim also vowed to make Kakao's de facto holding company, K Cube Holdings, fulfill social responsibility without further controversy.

The National Policy Committee at the National Assembly summoned Kim as a witness for an audit.

The chairman was also questioned over the role of K Cube Holdings, the largest stakeholder in Kakao with 10.57 percent, which he wholly owns.

During the audit, Rep. Yun Chang-hyun of the People Power Party also emphasized that Kim was deficient in fulfilling the company's corporate social responsibilities of job creation and paying more taxes.

Kim was also questioned over whether K Cube Holdings was violating the country's Banking Act that separates banking and commerce since Kakao also operates the internet-based Kakao Bank.

In response, Kim pointed out that K Cube Holdings was established before Kakao and that it had stopped all business activities due to conflicts in business relations after he established Kakao.

The Fair Trade Commission (FTC) has also launched an investigation into allegations that Kakao violated the Fair Trade Act.

Under the act, conglomerates are required to submit data on the status of affiliates, shareholders and other information to the FTC every year.

The chairman exercises control over Kakao through his directly owned 13.3 percent stake and the shares held by K Cube Holdings.

Kakao is South Korea's most powerful internet platform operator and operator of the nation's largest messenger app Kakao Talk.