A man uses his phone as he stands on an observation deck beneath the YTN Seoul Tower with a view of residential and commercial buildings, commonly known as the Namsan Tower, in Seoul on Sept 3, 2021. (ANTHONY WALLACE / AFP)
Brian Kim, the founder of internet giant Kakao Corp, has fallen from the top of South Korea’s rich list after the stock tumbled on fears of a crackdown on the country’s tech giants.
Kim’s fortune has dropped to $10.3 billion, down $4.5 billion from the peak in June, according to the Bloomberg Billionaires Index, after Kakao’s shares lost more than a fifth of their value this month. Samsung heir Jay Y Lee reclaimed the No 1 spot with a net worth of $10.7 billion.
A parliamentary probe into potential monopolistic practices by online platforms including Kakao and fellow internet titians like Naver Corp is scheduled to start next month amid concerns their expanding portfolio of services are squeezing out smaller businesses
Kakao, which operates Korea’s largest messaging app as well as everything from payments to ride hailing services, is under increasing pressure from the government, which is concerned about the growing role such platforms play in Korea’s economy. Lawmakers called the company a “symbol of greed,” while accusing the social media platform of abusing its dominance.
A parliamentary probe into potential monopolistic practices by online platforms including Kakao and fellow internet titians like Naver Corp is scheduled to start next month amid concerns their expanding portfolio of services are squeezing out smaller businesses.
“It’s become an incredibly critical risk for Kakao,” Park Ju-gun, head of corporate research firm Leaders Index in Seoul, said by phone. “The government has started to see Kakao in the same light as the conglomerates that have long been criticized for their oversized influence.”
In response to the building pressure, Kim vowed to spend 300 billion won ($253 million) to help smaller merchants and to consider exiting businesses that compete with mom-and-pop stores.
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Kim’s wholly owned investment firm, K Cube Holdings, will focus on creating “social value” in areas such as education, according to an announcement this month.
It’s become an incredibly critical risk for Kakao … The government has started to see Kakao in the same light as the conglomerates that have long been criticized for their oversized influence.
Park Ju-gun, head of corporate research firm Leaders Index in Seoul
Kakao shares have plunged 24 percent in September, the biggest monthly loss since October 2008. The company has lost $15 billion in market value amid selling by institutional investors.
Kakao confirmed the value of Kim’s holding, excluding shares he pledged as collateral.
Kim overtook Samsung’s Lee earlier this year to become South Korea’s richest person, in an example of how self-made entrepreneurs from the technology world were climbing the wealth rankings in the country, passing members of families from its decades-old conglomerates.
He established the predecessor to the company in 2006 and launched KakaoTalk four years later.
The messenger service has about 54 million users globally, 87 percent of whom are in the domestic market, according to a company filing in August.
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Kakao had surged more than sixfold from a pandemic low in March 2020 to a record high in June, driven by stay-at-home demand and the listing of its units.
Even after the recent declines, it’s still the sixth-largest company in South Korea, with a market value of $44 billion.