In a major achievement for Kakao, South Korean Internet Company is on the path of becoming the largest shareholder of its internet-only bank on Friday. With this achievement, it will emerge as the first non-financial services company to gain majority stake in South Korean lender.
Earlier on Wednesday, Financial Services Commission gave a green signal to Korean Investment Holdings’ plea to transfer nearly 15% and 29% of its present 50% stake in Kakao Bank to Kakao and Korean Investment Value Asset Management.
Kakao has gained a reputation as a renowned South Korean Internet company. It came into existence in the year 2010. It was established soon after a merger between Daum Communication and Kakao. Its name was changed to Daum Kakao in 2015 only to be reverted back to the original name Kakao.
Meanwhile, the deals are estimated at a joined 489.5 billion Won or $149.3 million.
Now beginning Friday, Kakao will gain a 34% share in the internet-only bank while the Korea Investment Value Asset Management is set to gain 29% stake thus making it Kakao Bank’s second-largest shareholder. This change will bring down Korea Investment Holding’s share in the internet-only bank to 5% minus one share.
Things were not as rosy for Kakao as it came across several obstacles in its struggle to become the largest shareholder since April. Earlier this year in April, it had first applied to the FSC for significant reviews. FSC had started the procedure of giving reviews only to put them on hold later on as a result of some charged leveled against Kakao Chairman, Kim Beom-Su’s violations of unbiased trade regulations.