Former Kakao CEO Rim Ji-hoon speaks during a press conference in this 2017 file photo. Courtesy of Kakao

By Park Jae-hyuk

Former Kakao CEO Rim Ji-hoon filed a lawsuit against the company's founder, Kim Beom-su, and Kakao Ventures CEO Chung Shin-a to receive up to 88.7 billion won ($73 million) in performance-based bonus pay, according to industry officials, Friday.

The plaintiff is said to be claiming that he deserves to be paid for his involvement in the previous investment of Kakao Ventures in Dunamu, the operator of the nation's leading cryptocurrency exchange, Upbit.

In March 2012, when Rim was the CEO of Kcube Ventures, which is now Kakao Ventures, he raised a fund worth 11.5 billion won to invest in promising startups. The fund was used partially in 2013 to acquire 1,000 redeemable, convertible preferred shares of Dunamu for 200 million won.

When Rim started leading Kakao in 2015, Kakao Ventures agreed to pay him a performance-based bonus, once the fund was liquidated.

A few years later, Dunamu grew into a company valued at over 2 trillion won, capitalizing on the cryptocurrency craze.

In March 2018, Rim resigned as Kakao's CEO and left the company in June 2020. He is currently working as a visiting professor at New York University's Stern School of Business.

After the fund was liquidated last December, reportedly allowing Kakao Ventures to earn over 300 billion won, Rim also celebrated the successful investment.

"The inaugural $10 million fund of Kcube Ventures, a venture capital fund I founded 10 years ago, finally got liquidated last December and returned more than $1 billion to the investors," he wrote on Twitter. "All the credit goes to the entrepreneurs who built extraordinary startups, my colleagues, the limited partners, who trusted me and invested in the fund, and finally, so many people who helped us throughout the journey. It was an unbelievable ride, THANK YOU!"

According to the agreement between Rim and Kakao Ventures, the size of the performance-based bonus pay for him is estimated to be at least 63.5 billion won.

Kakao Ventures, however, told him earlier this year that it would be difficult to pay him the bonus.

In response, Rim asked the Seoul Central District Court to order the company to pay him 501 million won immediately, with a plan to increase the amount asked later. He reportedly seeks to receive at least 79.4 billion won from the company.

Kakao claimed that it had to delay the payment until it receives approval from its shareholders and the board of directors.

"While checking the legal procedures for paying performance-based bonuses to our employees, we found out that we were not sufficiently prepared," a Kakao official said. "Our corporate alignment center advised Kakao Ventures to pay the bonus, after determining its validity."