Kakao union opposes division of personnel and demands to block small-scale mergers

(Seoul = Yonhap News) Reporter Oh Ji-eun = The Kakao Association of the National Chemical Fiber and Food Industry Workers' Union (hereinafter referred to as Kakao [035720] union) announced on the 11th that it opposes the division of Kakao, which lacks practical rights protection measures and explanations for workers and shareholders.

The Kakao union requested union members and minority shareholders to join in expressing opposition to the small-scale merger between Kakao and Kakao Investment, which is currently being promoted, and decided to consider solidarity and joint responses with minority shareholders depending on the company's response.

Previously, Kakao announced a plan to split the company into 'Kakao

In response to this, the union pointed out that only the business structure and schedule were presented, and that there was a lack of explanation on the need for division at this time, problems that cannot be solved with the existing structure, and who would bear the risks resulting from division.

In particular, the union argued that specific measures should be guaranteed in writing, not just a declaration of employment succession principles. This means that the standards for placement at each corporation, wages, evaluation, welfare, and maintenance of employment, and employment security measures in the event of future organizational reorganization must be clarified.

Employment insecurity for employees of affiliated companies, which will arise during the business reorganization process such as investment in subsidiaries and sale of shares by Kakao X, was also cited as a factor of concern.

The possibility of damaging shareholder value was also raised.

Even if shares are allocated proportionally, there is a risk of value decline due to future additional listings, capital increase, and transactions between affiliates, so the basis for calculating the split value and the direction of subsequent business reorganization must be transparently disclosed to general shareholders.

First, the union plans to put the brakes on the ongoing Kakao Investment merger and acquisition process, with the merger date set for January 1 next year.

Under the Commercial Act, if shareholders holding more than 20% of the total issued shares notify their opposition, a small-scale merger cannot proceed without a general shareholders' meeting.

Those subject to expression of opposition are shareholders registered in the shareholder register as of the 7th, and actual shareholders can submit their intention through trading securities companies.

The union requested the management to ▲ explain the need for division ▲ written guarantee of employment and working conditions ▲ disclose staffing standards ▲ prior union consultation in case of reorganization or sale ▲ disclose information on the value of division.

Kakao Chairman Seo Seung-wook said, "It is not a denial of management rights itself, but the intention is that workers' rights and shareholder value should be protected." He added, "The company must answer how it will protect employment and shareholder value, and we ask you to actively participate in expressing opposition to the pending small-scale merger."