Financial authorities 'serious disciplinary action' against Kakao Mobility, which inflated sales

Financial authorities have decided to impose heavy penalties on Kakao Mobility's alleged "inflating sales" as gross negligence.

At a regular meeting, the Securities and Futures Commission under the Financial Services Commission decided to impose a fine of 4.14 billion won, saying Kakao Mobility overstated its operating profit and operating expenses.

At the same time, he decided to recommend dismissal of the former finance executive and suspend his duties for six months, and also decided to impose sanctions on the company and its CEO, such as sending information on the prosecution.

The Securities and Futures Commission judged that recognizing the entire franchise fee as operating income based on the contract structure was a serious violation of accounting standards, but concluded that it was difficult to determine whether the issue was "deliberate."

The SFC's decision to dispose will be finalized at a plenary session of the Financial Services Commission next week.

Kakao Mobility has been under investigation by the Financial Supervisory Service since 2020 for intentionally inflating sales of its affiliated taxi business in preparation for its initial public offering, and the Financial Supervisory Service has proposed sanctions to the Financial Services Commission based on the results of the investigation.

In response, Kakao Mobility said it would respect the financial authorities' decision and humbly accept it with a heavy heart.

He added that the change in accounting standards was already carried out in March, so we expect confusion and uncertainty among accounting information users to disappear.