Kakao Founder Acquitted of Stock Manipulation Charges
The Facts
- Kim Beom-su, founder of tech giant Kakao Corp., was acquitted by the Seoul Southern District Court on Tuesday of stock manipulation charges related to the company's takeover of K-pop agency SM Entertainment in 2023. Kim had resigned as chairman of the company in March.
- Prosecutors had sought a 15-year prison term and a 500 million won ($350,000) fine for Kim, alleging he manipulated SM Entertainment's stock price to block rival Hybe's tender offer during the acquisition battle in February 2023.
- The court ruled that prosecutors failed to provide sufficient evidence of intent to manipulate prices, stating that Kakao's stock purchases differed significantly from typical market-rigging behavior in timing and method.
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The Spin
Narrative A
The court’s acquittal of Kakao founder Kim Beom-su exposes prosecutorial overreach in the high-profile SM Entertainment case. The court ruled that Kakao's mass share purchases showed no manipulative intent, while also criticizing coercive side-case investigations for pressuring witnesses and distorting the truth. The ruling lifts a nearly three-year legal cloud, allowing Kakao to refocus on its AI-driven growth strategy and begin restoring its reputation as an ethical, service-oriented company.
Narrative B
Kakao founder Kim Beom-su's acquittal does not end the legal and regulatory scrutiny. Prosecutors, struggling to accept the ruling, are expected to appeal the case all the way to the Supreme Court. With other Kakao executives like Lee Junho having already been convicted for illicit gains and authorities recently raiding 10 locations linked to large-scale stock manipulation, the case underscores ongoing systemic issues that continue to cast a shadow over South Korea's tech and financial sectors.
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