Feud deepens between Kakao execs over internal overhaul

Kakao’s ongoing efforts to reform its management have developed into an internal conflict between executives, worsening public sentiment toward the IT firm, which is facing its biggest crisis since foundation, according to industry officials, Thursday.

The dispute started after it was revealed that Kim Jeong-ho, a member of the Kakao Corporate Alignment Council, used an offensive word in reference to the disabled during a meeting with other executives last week.

After news outlets covered his controversial remarks, Kim wrote on Facebook that he used the word to criticize Kakao’s corporate culture.

He claimed that he found out its executives had outsourced a 70 billion won ($54 million) project to build a factory on Jeju Island without due process. He added that he apologized immediately to the meeting’s participants for his language.

He also alleged irregularities in Kakao’s other construction projects and its lax management, pointing to executives making excessively frequent visits to golf courses associated with the company.

As Kakao launched an internal audit and the majority of its employees threw their support behind Kim, Vice President Oh Ji-hoon in charge of Kakao’s property development and his teammates refuted Kim’s claim, arguing that the team had outsourced the construction projects after gaining approval from top management.

“As inaccurate information has spread via Facebook, our colleagues are suffering mentally,” the team wrote on Kakao’s intranet. “We would like to ask the company to review whether Kim’s posting on Facebook can be seen as workplace bullying.”

Kakao’s labor union asked for an investigation into the matters by the compliance and credibility committee, which includes outside experts. Kim is also among the committee members.

The union emphasized that Kim’s use of the slur cannot be justified, regardless of his intention.

The executive is known as a close friend to Kakao founder Kim Beom-su, who was referred to the prosecution for suspected stock price manipulation. Amid legal risks involving the founder and other executives, Kakao vowed in October to accelerate its reform efforts.