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[Alpha Biz=(Chicago) Reporter Kim Jisun] A court ruled that the correction order issued by the Fair Trade Commission should be canceled because it is illegal, saying that K-Cube Holdings, whose 100% stake is owned by Kakao founder Kim Beom-soo, violated the "regulation on the separation of industrial and financial capital."
The Seoul High Court's Administrative Affairs Department 7 ruled on the 7th in favor of the plaintiff in a lawsuit filed by K-Cube Holdings against the FTC, asking the FTC to "cancel the correction order."
The Fair Trade Commission issued a correction order in December last year and filed a complaint with the prosecution against K-Cube Holdings for exercising its voting rights on shares held by Kakao and Kakao Games. This is because financial and insurance companies belonging to cross-shareholding-restricted business groups with assets of 10 trillion won or more violated the Fair Trade Act (regulation on the separation of industrial and financial capital), which bans the exercise of voting rights of shares of local affiliates in principle.
The FTC judged that more than 95% of K-Cube Holdings' profits are financial companies subject to the separation regulations based on dividends and other financial returns. However, K-Cube Holdings filed a lawsuit against it, claiming that it exercised its voting rights because it judged that it was not a financial company. All of its financial profits were obtained by operating its own funds, which means that it cannot be classified as a financial company that operates customer deposit funds.
A key issue in the trial was whether companies that earn financial profits by operating only their own funds, such as K-Cube Holdings, are subject to the regulation on the separation of industrial and financial capital.
The court ruled in favor of K-Cube Holdings, saying, "The financial industry, referred to in the regulations on the separation of financial and industrial capital, should be seen as an industrial activity involving customers' deposits, that is, the management of other people's funds."
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
