[Alpha Biz= Reporter Kim Minyoung] It is anticipated that the financial authorities will confirm the level of sanctions against Kakao Mobility next month amid suspicions of inflating revenue.
According to the financial investment industry on the 27th, the Securities Futures Commission under the Financial Services Commission will discuss the level of sanctions related to Kakao Mobility's accounting irregularities on the 5th of next month. A conclusion could be reached on the same day.
Previously, the Financial Supervisory Service has been conducting audits on contracts Kakao Mobility entered into with taxi companies since last year. In February, it sent a pre-notice of measures applying the highest level of sanctions, known as 'intentional misconduct level 1,' including fines and recommending the dismissal of CEO Ryu.
Kakao Mobility classified 20% of its revenue from operation royalties as revenue items in its accounting books. However, the Financial Supervisory Service determined that only 3-4% of the fares, excluding the business cooperation contracts from the franchise agreements, should be recognized as revenue. The Financial Supervisory Service argues that such "revenue inflation" is a serious violation in the capital market as Kakao Mobility was preparing for its initial public offering (IPO).
The final level of sanctions depends on whether there was intentionality. Kakao Mobility acknowledges the Financial Supervisory Service's points and has corrected its financial statements, but it denies intentional revenue inflation. Moreover, whether there is an obligation between the two contracts is also a variable.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
