Financial Services Commission fined 3.5 billion for 'inflating sales' Kakao Mobility

The Financial Services Commission said it imposed a fine of 3.462.6 billion won on Kakao Mobility for violating accounting standards.

CEO Ryu Geung-sun and former chief financial officer were fined KRW 692.4 million.

Kakao Mobility accounted for 20% of the franchise fee received from taxis as operating profit and 17% of the business partnership fee paid to taxis as operating expenses in its financial statements from 2020 to 2022.

Based on this contract structure, the financial authorities judged that recognizing the entire franchise fee as operating income was a serious violation of accounting standards.

He explained that since he received 20% and returned 17%, he should have recognized only 3% of the net amount, not the total amount, as operating income.