Kakao Corp, a South Korean technology giant, is facing increasing regulatory pressure after the country’s president called for a review of its taxi-hailing app due to complaints of monopolistic practices. The company’s stocks have dropped 27% in the past three months, reflecting growing concerns from regulators. Analysts warn that these issues could worsen for the company as it tries to compete with its local competitor Naver Corp. The president stated that Kakao Mobility’s market behavior is monopolistic and immoral and called for government action. Kakao Mobility has announced that it will hold an emergency meeting with taxi drivers to reform its fee system. These regulatory problems add to the company’s existing concerns following a mass outage of its chat app KakaoTalk last year, which raised questions about its dominance in the market. Furthermore, one of its executives was recently arrested on suspicion of stock market manipulation. If a court finds Kakao Corp guilty, it may be forced to sell part of its stake in KakaoBank. In addition, the National Pension Service has changed its investment goal, seeking more active shareholder rights in its investment in Kakao. The company currently faces multiple legal disputes and investigations from prosecutors and financial regulators.
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