SEOUL, Jan 21 (Reuters) - Shares in South Korean financial services firm Kakao Pay Corp (377300.KS) jumped on Friday after the company said its CEO and two other executives were stepping down following a slump in the stock, amid fierce criticism of their exercising of stock options soon after the firm listed last November.
The shares surged as much as 11% on Friday, as the wider market (.KS11) slipped 1.2%, following the executives' departure, announced late on Thursday.
The stock had tumbled 35% as of Thursday's close since regulatory filings in early December showed about 90 billion won ($75 million) worth of stock options in Kakao Pay were exercised by the departing officials and others soon after the listing.
The shake-up at Kakao Pay comes in the wake of a boom in South Korean initial public offerings (IPO), stoked by strong demand from retail investors. In some cases share prices have collapsed soon after listings, triggering concern among retail shareholders that has spilled out onto investment forums. read more
Analysts attributed the fall in Kakao Pay stock at least partly to the negative impact on investor confidence caused by stock options being exercised, although the transactions were all legal. Shares in affiliate Kakao Bank (323410.KS) have also fallen since early December.
Unlike many other countries, in South Korea stock options can typically be exercised without any lock-up periods related to IPO timing.
The anger among retail investors has made political waves. Lee Yong-woo, a ruling party lawmaker, is preparing a draft of a bill that would make it necessary for insiders in listed companies to report planned share sales beforehand, his office told Reuters on Friday.
Kakao Pay said that among the eight executives that exercised stock options, five who will stay on at the firm at Kakao Pay, including incoming chief executive Shin Won-keun, will repurchase the shares they sold to strengthen responsible management.
"We apologise for causing many people disappointment by our misjudgement," Shin said. "We will return to the mindset of when Kakao Pay was first launched, and do our best to restore the trust of customers and shareholders."
($1 = 1,193.7600 won)
Reporting by Joyce Lee and Heekyong Yang; Editing by Kenneth Maxwell
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