(Bloomberg) -- Shares of Kakao Group’s various units slumped following reports of a probe into allegations of tax evasion by its founder, adding fresh woes to the South Korean internet titan that’s lost more than $25 billion in value since December. 

Kakao Corp. fell as much as 5.1% to its lowest since March, taking its losses this year to more than 20%. Affiliates Kakao Pay and KakaoBank declined to levels unseen since their stock market debuts. Kakao Games lost as much as 3.6%.

Local media including Yonhap News reported that police were looking into allegations raised by a civic group that Kakao’s founder, Brian Kim, dodged 886 billion won ($743 million) of taxes during the merger of Kakao and Daum in 2014. Kakao denied the allegations as “groundless,” adding that the merger had been agreed by shareholders.

The developments are unfortunate for a group whose shares had already taken a beating following share sales by executives and the Korean government’s crackdown on internet companies’ market dominance. KakaoBank and Kakao Games are among the worst performers on the MSCI Asia Pacific index this year.

Kim, the founder of the empire that spans online shopping, payments, ride-hailing and other services, briefly became the country’s richest person last year after the group’s shares surged during the pandemic.

However, the group’s rise also made it a target of regulators for its monopolistic business models that are threatening mom-and-pop stores. 

Kim also personally faces allegations that Kakao’s de-facto holding company K Cube Holdings -- effectively structured as founder Kim’s family office -- violated regulations that forbid financial investment holding companies from exercising voting rights in non-financial affiliates.

In South Korea, police are required to investigate all complaints and forward its findings to prosecutors who then determine if an official investigation should be launched. In its statement on Wednesday, Kakao said it faced similar allegations in 2018, which were reviewed and dropped by prosecutors in 2019.

The activists who lodged the tax evasion complaint against Kakao had also unsuccessfully requested an investigation from the National Tax Service, according to the Yonhap News report.

©2022 Bloomberg L.P.