Prosecutors have again sought a 15-year prison term for Kakao founder Kim Beom-su, who heads the company's Future Initiative Center, in an appeals trial over alleged stock price manipulation during the takeover of SM Entertainment. Kim was acquitted at his first trial.
At the final hearing on the 23rd before the Seoul High Court's Criminal Division 4-1, presided over by Senior Judge Kim In-gyeom, prosecutors asked the court to impose 15 years in prison and a fine of 510 million won on charges of violating the Financial Investment Services and Capital Markets Act. The demand matches the one made in the first trial.
Prosecutors also sought 12 years in prison and a fine of 510 million won for Bae Jae-hyun, former head of Kakao's investment division, who was indicted on the same charges. That too matches the first-trial demand. For Kakao and Kakao Entertainment, both charged under provisions holding corporations liable for acts by their officers, prosecutors sought fines of 500 million won each.
"The lower court's ruling contains errors in its findings of fact and in its application of the law, and the acquittals of the defendants should be overturned," prosecutors said.
Kim was indicted on charges of buying about 240 billion won worth of SM Entertainment shares in 553 separate transactions for the purpose of manipulating the price, keeping the stock above the 120,000-won tender offer price in February 2023 to block a tender offer by rival HYBE. He also faces charges of failing to comply with rules requiring disclosure of a large shareholding, covering an 8.16% stake in SM Entertainment, by concealing shares held by One Asia Partners.
The first-trial court acquitted Kim in October last year. It found that testimony from a key witness lacked credibility and declined to admit it as evidence. The court also held that Kakao's large-scale open-market purchases during HYBE's tender offer period could not be deemed price manipulation merely because they affected the share price.
