Evidence from Kakao Mobility′s claim that it was not an accounting manipulation was confirmed to be a contract signed after the audit period

Evidence from Kakao Mobility's claim that it was not an accounting manipulation was confirmed to be a contract signed after the audit period: COMPANY / Reporter Kim SangJin / 2024-07-08 07:16:15

[Alpha Biz= Reporter Kim Sangjin] Kakao Mobility has countered allegations of accounting manipulation by citing a "business partnership agreement" as evidence, but it has been confirmed that this agreement was concluded after the Financial Supervisory Service's audit period. The FSS views these two contracts as essentially identical.

In Kakao Mobility's franchise taxi business structure (referenced in the graphic below), transportation companies pay KM Solution 20% of the fare, which in turn pays Kakao Mobility 19-20% of the fare. Kakao Mobility then returns 16-17% of the fare back to the transportation companies.

Last July, the FSS initiated an audit of Kakao Mobility and determined that the franchise agreement and business partnership agreement are effectively the same. Given this, Kakao Mobility should have reported only about 3% of these expenses as revenue. However, it appears Kakao Mobility reported the entire 20% as revenue in order to inflate its size in preparation for its listing.