en.Wedoany.com Reported - A fund contributed by LY Corporation (Line Yahoo) has invested 300 billion won in Kakao Games through a capital increase and convertible bonds, becoming its largest shareholder. On the 22nd, Kakao Games held an extraordinary general meeting of shareholders at the Kakao AI Campus in Yongin, Gyeonggi Province, appointing former Line Games Vice President Kim Tae-hwan and Chief Business Officer Lee Si-woo as internal directors, who were subsequently appointed as co-CEOs at a board meeting. The company, which has recorded operating losses for six consecutive quarters since the fourth quarter of 2024, has entered a new phase of board leadership under Line Yahoo with the secured funding and new co-CEO structure.
Payment for a third-party capital increase of 239.99999 billion won targeting LAAA (L Triple A) Investment, a fund with LY Corporation (Line Yahoo) as the largest investor, and a third private convertible bond of 60 billion won was completed on the 19th of this month. These two transactions totaled 300 billion won. The effectiveness of the director appointments announced in the general meeting call notice was conditional upon the completion of this transaction, and with the payment completed, the core conditions for establishing a new board were met.
The agenda was approved. The appointments of internal directors Kim Tae-hwan and Lee Si-woo were passed with 99.9% approval based on the number of shares voted. The appointment of external director Lim Tae-seop was approved with 100.0%, and non-executive director Seo Seok-ho with 99.9%. The amendment to the articles of incorporation regarding the holding or disposal of treasury shares was also approved with 100.0%. The addition of a supplementary clause on the limit for issuing new shares received 95.7% approval, with 4.3% opposing or abstaining. This is interpreted as some shareholders voting against due to concerns over equity dilution, as the clause leaves room for future additional share issuance.
The shareholding structure has subsequently changed. Kakao's stake decreased from 37.93% to 14.68%, while LAAA Investment became the largest shareholder with 33.43%. The 17,458,354 newly issued shares have a one-year lock-up period from the listing date, seen as a mechanism to stabilize the equity base after the transfer of management control rather than pursuing short-term gains. LAAA Investment is 100% owned by Petrichor No. 6 Private Investment Joint Venture, whose largest investor is Line Yahoo. This indicates that Kakao Games has transitioned to a new governance structure backed by Line Yahoo's capital.
The board structure has also changed with the addition of external director Lim Tae-seop. Kakao Games' registered directors increased from five to seven, and external directors from three to four, raising the proportion of external directors to 57.14%.
New co-CEO Kim Tae-hwan graduated from Yonsei University's Department of Political Science and Diplomacy, joined Nexon in 2004, and served as Vice President of Nexon Korea, Chief Business Development Officer of Nexon Japan, and Vice President of Nexon America. Kim joined Line Games in 2023 as Vice President and Chief Strategy Officer and is reportedly a key figure in leading Line's acquisition of Kakao Games shares. Co-CEO Lee Si-woo, responsible for internal operations, graduated from Sogang University's Business Administration Department, worked at NHN and Wemade, led mobile business from the early days of Kakao Games, served as head of Kakao Games' mobile business division from 2015 to 2022, and has been overseeing business as CBO since 2023. The industry expects Kim to focus on growth strategy and global business expansion, while Lee handles organizational operations and business execution, aiming to implement new strategies through external talent while maintaining organizational stability through internal personnel.
Line's influence extends to the financial line. The new Chief Financial Officer Shin Kwon-ho, appointed on the 19th, also previously served as CFO of Line Games. External director Lim Tae-seop, a professor at Sungkyunkwan University GSB, previously served as co-CEO of Goldman Sachs Korea and CEO of Macquarie Securities Korea. As for non-executive directors, Petrichor Partners Managing Director Seo Seok-ho, representing the new largest shareholder, has joined. Former CEO Han Sang-woo resigned from his position following the appointment of the two co-CEOs.
Regarding rumors of a merger with Line Games, the new CFO stated that nothing definitive has been decided, neither confirming nor denying the possibility of a merger. However, he clearly expressed a stance on cooperation, stating that Kakao Games has extensive collaboration with Kakao affiliates and SM Entertainment's community projects, and that cooperation with Line Games will proceed within the scope of not harming shareholder value, emphasizing that Kakao Games, with its scale and experience advantage, will play a central role.
The new management faces demands from the minority shareholder group "Kakao Games Shareholder Alliance," including specific shareholder return policies, establishing formal communication channels, canceling treasury shares, and disclosing the release schedule for core new titles. Criticism has also emerged over the new co-CEOs' absence from the general meeting. Shareholder Alliance representative Park Jong-gu expressed expectations for the transition to the Line Yahoo system, hoping to actively utilize the Line platform to become Korea's Tencent. Regarding treasury shares, the new CFO stated they could be used to attract external talent or directly enhance shareholder value through cancellation, and that an opportunity to address questions will be arranged soon.
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