2023-05-09 09:04:55
Establishment of Dawoo Technology…Establishment of Kiwoom.com Securities, an online securities company in 2000
Kiwoom Securities 2022 sales of KRW 8,942.3 billion, operating profit of KRW 656.4 billion
Disgraceful resignation due to suspicion of stock price manipulation related to the disposal of 1.4 million shares of Dow Data
[인사이트코리아=이재형 기자] Kim Ik-rae, former founder and chairman of the Daukium Group, took responsibility for allegations of stock price manipulation and resigned from all positions. Starting with the establishment of Dawoo Technology, a software company, former Chairman Kim entered the investment industry with Kiwoom Securities, laying the foundation for the Daou Kiwoom Group, which encompasses the information and communication industry and the financial industry. However, he left a stigma as a businessman when he was recently resigned in disgrace due to stock price manipulation.
Chairman Kim, who is credited with pioneering the domestic venture industry, started his first career at IBM Korea in 1976. There is an anecdote that at the time of the interview after his written exam, the manager in charge told him that he had passed the job right away, saying, “Don’t think about going to another company, come to our company.” He worked at IBM Korea for 2 years and 8 months in the fields of sales management, finance, and planning.
He is praised for being bold and having a strong conviction. While working for IBM Korea, the American president of the Far East Headquarters asked, “What do you think of IBM?”, he replied, “IBM must be a sound and good company. However, he seems to have taken all the money he earned back to the head office and neglected the development of IBM Korea and Korea.”
At the IBM headquarters, Kim’s attitude, which was critical of the company, was secretly ordered to figure out his trends, and former Chairman Kim learned of this fact and decided to leave IBM Korea.
Established Dawoo Technology, the foundation of Daum Kiwoom Group
After that, he tasted failure in his work life several times and turned his eyes to business. In 1981, he founded Qnix, a computer-related venture business corporation that was not common at the time. As Qnix was selected as Microsoft’s Korean agency, the business scale began to grow. However, it is known that former Chairman Kim left Qnix due to disagreements among the founders.
Former Chairman Kim established Dawoo Technology in January 1986 with employees who worked together at Qnix. Commemorating the launch with his staff, he climbed to the top of Hwaya Mountain and promised, “We must make Daou Technology the best company in our country,” and “I will do an IPO in the next 10 years.” This is the parent of the Dawoom Group.
Daou Technology set its business area in computer software. With the Unix Koreanization project as an opportunity, he made profits by translating famous foreign software into Korean. Following Unix, Dawoo Technology was also in charge of localization of SunSolaris, Informix, Netscape, and Navigator. In August 1997, Daou Technology went public. His promise of an IPO within 10 years has become a reality. Daou Technology started with the establishment of Daou Data, an IT service company, in 1992 and expanded its business.
Entered the financial industry by establishing an internet company and a securities company
Around this time, he said he was convinced that the era of online stock trading would come. In 2000, he established Kiwoom.com Securities, which was unusual at the time, and also reached out to the financial industry. However, he gave up his title at Dawoo Technology and became the CEO of Kiwoom.com Securities with his usual belief that it was a professional management system. In an interview with an economic magazine in 2000, he recalled, “The Internet solution developed by Daou Technology served as the basis for establishing subsidiaries such as Kiwoom Securities.”
In 2006, the dot com was removed from the name and changed to the current name, and in 2009 it was listed on the KOSPI. Kiwoom Securities was designated as a comprehensive financial investment company in April 2022. Comprehensive financial investment businesses are those designated by the Financial Services Commission among securities companies with equity capital of 3 trillion won or more. Kiwoom’s capital as of the end of last year reached 4 trillion won. Former Chairman Kim raised Kiwoom Securities into a company with consolidated sales of 8,942.3 billion won and operating profit of 656.4 billion won in 2022. Kiwoom Securities is a trading platform with the largest number of investors with low commission rates. In addition, low credit interest and high leverage ratio are considered strengths.
Suspicious management succession process
The management succession process of the Daukium Group is somewhat complicated. In the beginning, it was a structure in which former chairman Kim dominated the entire group. It was a cross-shareholding structure in which former Chairman Kim controlled Daou Technology through Daban Tech, Daou Technology controlled Daou Data, and Daou Data controlled Daban Tech again.
However, after going through various processes, former chairman Kim’s eldest son, Kim Dong-joon, CEO of Kiwoom Investment, virtually controls the group through e-money. As of the end of last year, Internet company e-Money is the largest shareholder of Daou Data, Daou Data controls Daou Technology, Daou Technology controls Kiwoom Securities, and Kiwoom Securities controls Kiwoom Investment. The largest shareholder of e-money is CEO Kim Dong-joon.
Emoney, the pinnacle of the group’s governance structure, was one of Daou Technology’s subsidiaries at the time of its establishment. However, in 2006, for the reason of simplifying the structure of affiliates, former Chairman Kim took over all 11 million shares (49.48%) of Daou Data held by Daou Technology. The governance structure was changed from former Chairman Kim → Daou Data → Daou Technology.
In 2009, former chairman Kim bought all shares of e-money owned by subsidiaries such as Daoudata to secure a 99% stake. Afterwards, former Chairman Kim donates 50% of his e-money shares to his e-money free of charge. As a paid-in capital increase was also made, former Chairman Kim’s stake was gradually diluted. Emoney began buying Dow Data stock in 2009. It received a loan with former Chairman Kim’s shares as collateral and became the source of funds for the purchase of shares in Dow Data. Currently, eMoney owns a 31.56% stake in Daoudata.
Former Chairman Kim sold 940,000 shares of Daoudata to e-money in 2020. Since then, it has passed 1.3 million, 800,000, and 350,000 shares in turn. This lowered his stake in Dow Data from 40.64% to 26.66%. Dow Data also handed over 160,000 of its treasury shares to e-money in 2020. Former Chairman Kim Ik-rae gave a total of 2 million shares to his children in October 2021. He handed over 1.2 million shares to CEO Kim, 400,000 shares to his eldest daughter Jinhyeon, and 400,000 shares to his second daughter Jini. CEO Kim currently holds a 33% stake in e-money, so it is evaluated that the management succession process is virtually complete.
From the myth of the venture industry to suspicion of stock price manipulation
Former Chairman Kim is suspected of manipulating the market price in the recent controversial stock price crash from SG. He denied the allegations, but said he felt a sense of social responsibility and was giving up all positions within the group. Former Chairman Kim held a public apology press conference at the headquarters of Kiwoom Securities on the 4th and announced his intention to step down from management. He said that he would return the 60.5 billion won he secured from the stock sale, which was controversial due to the recent stock price crash, to society. An official from the Daukium Group said, “It is right to resign from all positions held by Chairman Kim in the Daukium Group and step down from the front line of management.”
Former Chairman Kim sold 1.4 million shares (3.65%) of Daou Data at 43,245 won per share through off-hours trading (block deal) on the 20th of last month, securing 60.543 billion won. The next day, Dow Data immediately hit the lower limit (-29.97), and suspicions that it was involved in stock price manipulation erupted.
Former Chairman Kim said, “As the chairman of a group, I bow my head in apology for causing social controversy.”
Suspicions following the resignation of former chairman Kim
Ra Deok-yeon, CEO of H Investment Consulting Company, who is accused of violating the Capital Markets Act by manipulating stock prices, said, “It is necessary to check whether the 60 billion won sold by Chairman Kim Ik-rae has been received in his account.” There is a possibility, and if received, the source of the funds should be investigated.” He insisted, “If real money did not come and go, it was short selling at the market price.” However, Kiwoom Securities said that the proceeds from the sale were transferred to Chairman Kim’s own Kiwoom Securities account.
In addition, suspicions arose that Mr. Amugae Kim from Kiwoom Securities, who was the subject of investigation for stock price manipulation, was related to former chairman Kim’s son-in-law. It is known that Mr. Kim met with investors and showed off his friendship by showing a picture taken with former Chairman Kim’s son-in-law. Regarding this, Kiwoom Securities is in a position that the relationship is not true.
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