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South Korean tech firm Kakao unveils a ₩300 billion fund to help SMEs

South Korean tech firm Kakao unveils a ₩300 billion fund to help SMEs
South Korean tech firm Kakao unveils a ₩300 billion fund to help SMEs

Kakao Group, South Korea's largest mobile technology company, has reportedly pledged to invest more than ₩300 billion ($255.4 million) to help support small enterprises and the self-employed individuals.

According to reports, the new fund is perceived to be a conscious effort on the company’s part to appease increasing public outrage over its fast business development.

Top officials from Kakao Corp. and its affiliates gathered at the start of the week to set forth a number of measures for the company’s "coexistence" with small companies, which, according to critics, are being pushed out of the market by the massive platform, one of these measures was the creation of the ₩300 billion fund.

Kim Beom-Su, founder and chairman of Kakao, stated that the present criticism is a powerful warning from the society. The time for Kakao and all of its affiliates to leave behind the ways they have grown over the last decade is now. Going forward, the company should seek fundamental adjustments to achieve socially responsible growth.

The package includes a proposal to convert K Cube Holdings, an investment company controlled entirely by Kim and family, into a social venture.

For the record, the Fair Trade Commission is currently investigating K Cube Holdings, which owns 10.59% of Kakao Corp., on suspicions of withholding necessary information or submitting fraudulent reports during the last five years.

Prior to the news, it was reported that the FTC was investigating another alleged law infringement involving the business, this time involving its holdings of Kakao Corp. shares.

Under South Korean law, a financial firm is prohibited from having a specific amount of stock and voting rights in a company from the non-financial sector. The law is specifically aimed at separating banking and commerce.

On the back of the almost ubiquitous chat software KakaoTalk, the organization has shown dramatic growth over the last decade, expanding into a number of industries like banking, ride-hailing, e-commerce, and content.

In recent weeks, as authorities began to investigate the influence of big platforms, the newest Korean tech giant has faced a flood of accusations regarding unfair tactics and market dominance abuse.

Apart from the ₩300 billion fund and K-Cube plans, the firm has also committed to withdraw or restrict its operations in regions where it competes with smaller offline competitors.

Source credit: http://www.koreaherald.com/view.php?ud=20210914000805

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Vinisha Joshi

Vinisha Joshi

Despite graduating with an engineering degree in electronics and communication, Vinisha Joshi chose the road less travelled, and decided to pursue her career in content writing . Currently, she pens down articles for cuereport.com and a few other distinguished news platforms, pertaining to business and finance.