Democratic Party presidential candidate Lee Jae-myung urged a thorough investigation into the case of Kakao Pay CEO Ryu Young-joon, which was embroiled in controversy over ‘eating’ by selling a large amount of Kakao Pay shares on the 19th.
Candidate Lee wrote to his social networking service (SNS) on the same day, “The mass sale of CEO Ryu and executives took place just one month following listing and immediately following entering the KOSPI 200. “As a management, I can’t help but be criticized for being a moral hazard focused on maximizing profits from the sale rather than protecting shareholders.”
On the 10th of last month, regarding a month following Kakao Pay’s listing, CEO Ryu and eight executives of Kakao Pay sold 90 billion won worth of Kakao Pay stocks acquired through stock options through following-hours trading. The day they sold their stocks was the first day Kakao Pay entered the KOSPI 200 index. CEO Ryu turned 46.9 billion won into cash. After CEO Ryu and other executives sold a large amount of stock, the stock price of Kakao Pay plummeted. As the criticism grew, CEO Ryu, who was appointed as co-representative of Kakao, voluntarily resigned as co-representative.
Candidate Lee said, “The damage has been passed on to 1.82 million minority shareholders.” He urged the financial authorities to “check out whether there is any use of inside information or other market disturbances in the process of selling stocks.” It also revealed a plan to improve the system to prevent a second Kakao Pay scam. Candidate Lee said that the period of exercise of stock options by the management of new listed companies should be limited, such as the commitment of institutional investors to hold stock options and the protection of employee stock ownership. He said that when selling treasury stock, it is necessary to prevent damage to minority shareholders by increasing transparency by disclosing the price and date in advance. Candidate Lee said, “Strictly cracking down on unfair practices in the stock market is the first step in opening the era of the 5000 stock index.”
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