Started as a mere app developing company, South Korea’s platform giant Kakao has been on the fast track of success, becoming the nation‘s fifth-largest business entity just in 11 years.

Founded by Kim Beom-su, who used to run a PC room and work at Samsung SDS, the dominant takeover of the messenger app KakaoTalk laid the groundwork for the Kakao group’s expansion in the last decade. According to the Korea Fair Trade Commission, Kakao had 158 affiliates and subsidiaries in the first half of last year.

Having 45 million monthly users registered to its messenger app, the company’s affiliates went public one by one in recent years. Kakao and its two affiliates Kakao Bank and Kakao Pay raised massive capital from investors betting big on their propaganda of innovation.

In terms of market value, Kakao group was the fifth largest business group behind only Samsung, SK, LG and Hyundai Motor in November.

Kakao group’s market capitalization reached a total of 126.8 trillion won ($106.3 billion) by the end of November when Kakao Pay’s stock price rose to its highest price of 238,500 won per share only a month after its listing.

Investors, however, are seen leaving Kakao after a series of mishaps that dampened the IT giant’s reputation.

With Kakao Pay and Kakao Bank respectively closing at 139,500 won and 45,100 won, both 52-week lows, the IT giant group’s total market value Monday dropped to 85.7 trillion won, down 32 percent from seven weeks ago.

Some critics and market analysts have blamed Kakao that its actions are not much different from the old bad habits of Korean chaebols.

Last year, Kakao came under fire for the controversy surrounding the company’s hasty expansion, which played a role driving small businesses away from the market or into a corner. This led to summonings of the Kakao founder to the National Assembly’s state audit.

Kim eventually vowed to scrap some of Kakao’s services that compete against small or self-owned businesses, including flower delivery. In the process, he also vowed to create a fund worth 300 billion won to support small firms.

The Kakao founder faced more heat over the allegations that K Cube Holdings, his investment company and the de facto holding company of Kakao, omitted or fabricated documents in regulatory submissions.

In December, a civic group accused Kim and his family members of a massive tax evasion in the 2014 Daum and Kakao merger, filling the accusation with the National Police Agency to claim that Kim and his family members evaded a total of 886.3 billion won in taxes.

Last week, Ryu Young-joon, the appointee for Kakao’s next CEO, had to resign amid escalating criticism over the mass sale of his Kakao Pay share sales.

Ryu, CEO of Kakao’s mobile payment unit, in December exercised the stock option to sell his Kakao Pay shares only a month after the listing of the company. Through the mass sale of Kakao Pay shares, Ryu and several senior executives collected a total profit of almost 90 billion won.

Apologizing for disappointing stakeholders, Kakao said it will ban its CEOs and executives representing its subsidiaries from selling company shares within one to two years after being listed on the market through setting up a new control tower.

In regard to the two subsidiaries -- Kakao Entertainment and Kakao Mobility -- that were gearing up to go public this year, Kakao said the company will reconsider the initial public offerings for the greater good of the community.

However, such countermeasures to quell investors' woes seem to be too late to back out of the situation, experts said. They stressed that the reputation of not only the company, but also its founder Kim as a successful and responsible enterpreneur are also at stake.

The image of a CEO who brings digital transformation for the public good, not profit, is tainted, Wi Jong-hyun, business professor at Chung-Ang University, said, "I don’t think he realizes how important that is."

The split-off method that Kakao used to expand its businesses has been under criticism for infringing shareholders' rights.

When Kakao Pay and Kakao Bank went public, Kakao used the split-off method, which created entirely-owned subsidiaries under the IT giant. As a result, the shares of the new companies were not distributed to existing shareholders of Kakao, according to the People‘s Solidarity for Participatory Democracy. In this way, Kim could keep his Kakao shares and still have impact over the company’s subsidiaries, the group claimed.

“The biggest problem of split-offs going public is that it damages the values of existing shareholders,” it said in a statement.

“In case of Kakao, it has split off major subsidiaries in Kakao Bank and Kakao Pay while majority shareholders and executives enjoyed massive listing profits. But minor shareholders suffered a lot of damage in diluting Kakao’s stake value and losing their influence on the subsidiaries.”

Pointing out that split-offs are rarely carried out abroad to protect minor shareholders from losing money, the civic group called upon the government and the National Assembly to come up with necessary guidelines and regulations.