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Daum Kakao faces tax investigation

Tax authorities launched an audit into Daum Kakao Corp. as they dispatched inspectors to the Internet portal giant’s Pangyo office in Gyeonggi Province on Tuesday.

While the background of the probe from the National Tax Service has not been confirmed, some market insiders alleged that the move was to verify possible allegations such as irregular intragroup trading and tax evasion.

Further, the NTS reportedly carried out the raid without making prior notifications to Daum Kakao, whose headquarters are located on Jejudo Island.

The probe might be a regular one, but considering that the number of inspectors was far more than the average, at about 50, it appears to be an extraordinary one.

Observers said the allegations could involve irregularities during the merger process between Daum Communications and Kakao, the operator of social networking service KakaoTalk, during the second half of last year.

Daum Kakao has yet to unveil its official stance on the tax probe.

Its stock price, after peaking at 117,000 won ($105) per share on June 9, dropped for the fifth consecutive trading session to close at 101,700 won Tuesday.

The combined company’s payroll now exceeds 2,200 staff, while before the merger, Daum Communications’ staff numbers had stayed at about 1,500.

By Kim Yon-se (