The richest man in Korea lost 7 billion USD after a series of scandals

 The richest man in Korea lost 7 billion USD after a series of scandals

Brian Kim - founder and chairman of Kakao lost nearly half of his fortune because the company's stock has been falling for the past half year.

The story of Brian Kim - founder and chairman of Kakao once attracted great media attention. From a poor background, having to share a room with all 7 family members, he surpassed Samsung heir Jay Y. Lee to occupy the richest throne in Korea in 2021.

However, a series of scandals followed, causing Kakao stock to drop 48% since its June 2021 peak. The first is the Kakao monopoly concern. Then there was the Kakao Pay senior management selling shares not long after the IPO. Kim is also accused of tax evasion.

Kim's fortune has therefore also evaporated $7 billion from there, down to $8 billion, according to the Bloomberg Billionaires Index. This fortune is obtained mainly from the 24% stake in Kakao. In March 2021, Kim and his wife signed the Giving Pledge, to donate most of their wealth to charity.

Brian Kim - Founder and Chairman of Kakao. Photo: Kakao

Brian Kim - Founder and Chairman of Kakao. Photo: Kakao

Kim was the first of the brothers to go to college. He founded the company in 2006 and launched the messaging app KakaoTalk four years later. The company gradually expanded into banking, online shopping, gaming and ride-hailing. Covid-19 makes Kakao's services even more profitable.

In less than 2 years, 3 of their subsidiaries made IPOs, including Kakao Games, KakaoBank and Kakao Pay. Many other companies are expected to continue listing, including Kakao Mobility and the business that operates the digital comic platform Piccoma.

However, the rapid growth momentum made Kakao the target of the authorities. Their domination in the market has led them to be criticized as threatening small shops. In September 2021, Kim pledged to spend 300 billion won to support small businesses and confirmed that he would consider eliminating competing services, such as flower delivery.

"Recently, we have failed to realize our community responsibilities when we are overjoyed with the growth of our subsidiaries," Kim said during the October 2021 hearing. With the support of the people, we will make efforts to change to remember how we started."

At the end of last year, Kakao Pay executives sold shares after the company made its IPO in November, sparking a sell-off in shares of its companies. Last week, three leaders of this company submitted their resignations.

Kim was also accused by an activist group of using multiple accounts to evade capital gains tax of up to 886 billion won ($722 million) in the merger between Kakao and Daum in 2014. In 2019, the Prosecutor's Office of the Court The Seoul Central District has denied a similar allegation. "The merger is based on an agreement between the shareholders of both Daum and Kakao. It is also very difficult for a third party to want to influence," a representative of Kakao said.

"These issues have had a negative effect on investor sentiment," said Hyunyong Kim, an analyst at Hyundai Motor Securities. "Expectations for big tech companies are dwindling."

This is the latest example of how things are turning for tech billionaires. The global tech industry is going through a rough patch as central banks signal interest rate hikes. Shares in this sector are falling after hitting a peak last month, as investors sell off in favor of cheaper options.

"It is difficult to know when interest rate concerns will end. So are the regulatory issues," said Oh Donghwan, an analyst at Samsung Securities. "The current trend could continue. continue until there is a turning point".