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Former Daou Kiwoom Group Chairman, who resigned amid controversy, seeks reappointment as non-executive director at Daou Data

[비즈한국] It has been confirmed that Kim Ik-rae, former Chairman of Daou Kiwoom Group, who stepped down from his position to take moral responsibility for the 2023 stock market crash, is pushing for reappointment as a non-executive director at Daou Data032190 and Saramin143240.

Former Chairman Kim announced his resignation as chairman of Daou Kiwoom Group following the stock price crash triggered by SG Securities in April 2023. Just before the stock price of Daou Data, a Daou Kiwoom Group subsidiary, plummeted, Kim sold 1.4 million shares for 60.5 billion won. This raised suspicions that he might have used undisclosed information to sell his shares before the crash.

Following the controversy, former Chairman Kim held a press conference in May 2023, stating, "As a businessman from whom moral responsibility is expected, and as the chairman of a group, I apologize with my head bowed for causing social controversy." He added, "I will resign from my positions as chairman and chairman of the board of Kiwoom Securities039490, and I intend to return the proceeds from the sale of Daou Data shares to society."

However, the prosecution decided not to indict former Chairman Kim in May of last year. This was because it was determined that he had been considering the stock sale since January 2023 and there was no evidence that he received stock-related information from Kiwoom Securities.

Although former Chairman Kim stepped down as chairman of Daou Kiwoom Group, he maintained his non-executive director positions at subsidiaries Daou Data and Saramin. Daou Data serves as the group's holding company. The governance structure of Daou Kiwoom Group flows from Daou Data to Daou Technology023590, and then to Kiwoom Securities.

Former Chairman Kim never stated that he would step down as a non-executive director of Daou Data and Saramin. However, participation in the Daou Data board allows him to exert indirect influence over Kiwoom Securities. This has led to criticism that his resignation as group chairman was a mere loophole.

The terms for former Chairman Kim’s non-executive director positions at Daou Data and Saramin expire on March 30 and March 21, 2025, respectively. Some in the business world expected that new non-executive directors would be appointed once his terms expired.

However, it has been confirmed that Daou Data has included the reappointment of former Chairman Kim as a non-executive director in the agenda for the general shareholders' meeting on the 28th. The Daou Data board explained the reason for his reappointment, stating, "Based on his high expertise in the finance and IT industries, he has served as CEO of Daou Data and chairman of the board of Kiwoom Securities, and has contributed to organizational stability and competitiveness by exercising strategic leadership in overall company operations." They added, "We believe he will play an important role as a board member in strategic decision-making and setting management direction."

Daou Data's shareholders consist of E-Money (31.56%), former Chairman Kim Ik-rae (23.01%), and Kim Dong-jun, CEO of Kiwoom Investment (the eldest son of Kim Ik-rae) (6.53%). The largest shareholder of E-Money is CEO Kim Dong-jun. Essentially, the family of former Chairman Kim Ik-rae holds more than half of the shares in Daou Data. Therefore, it is highly likely that the reappointment of Kim Ik-rae as a non-executive director will pass at the upcoming Daou Data shareholders' meeting.

Saramin is also holding a shareholders' meeting on the 24th to address the reappointment of former Chairman Kim as a non-executive director. The Saramin board stated regarding the reappointment, "He has contributed to improving the company's performance by providing diverse opinions on the overall management situation," adding, "We recommend him as we believe he will contribute to increasing corporate value based on his excellent business acumen and understanding of the market."

The largest shareholder of Saramin is Daou Technology with a 32.59% stake, and the second-largest shareholder is Daou Data with 6.24%. Former Chairman Kim Ik-rae and Kiwoom Securities also hold 3.10% and 2.91% stakes in Saramin, respectively. Considering this ownership structure, there does not appear to be any major obstacle to former Chairman Kim being reappointed as a non-executive director of Saramin.

If former Chairman Kim succeeds in his reappointment as a non-executive director at both Daou Data and Saramin, his influence over Daou Kiwoom Group is expected to be maintained for the time being. Bizhankook reached out to Kiwoom Securities and Saramin for specific comments on this matter but received no response.