A Decisive Day for Kakao Corporation: First Trial Verdict for Founder Kim Beom-soo Today

[Financial News] The first trial verdict for Kim Beom-soo, founder of Kakao Corporation, who was indicted on charges of manipulating stock prices during the acquisition of SM Entertainment, will be delivered on the 21st.
The Seoul Southern District Court’s Criminal Division 15, presided over by Judge Yang Hwan-seung, will hold a sentencing hearing at 11 a.m. for Kim, who was charged with violating the FSCMA.
Kim Beom-soo was brought to trial for allegedly conspiring with One Asia Partners and others to manipulate the share price of SM Entertainment above the public tender offer price of 120,000 won during the acquisition process on February 16–17 and 27, 2023, in order to block a competing bid from Hybe.
Prosecutors believe that Kim, as the group’s top decision-maker, was briefed on and approved the price manipulation plan in advance, and that executives systematically mobilized funds to carry out large-scale on-market purchases to influence the stock price.
At the previous hearing, prosecutors requested a sentence of 15 years in prison and a fine of 500 million won for Kim Beom-soo.
Prosecutors stated, "As the head of Kakao Corporation and the ultimate decision-maker, the defendant was informed of legitimate competitive methods but consistently opposed them, instead instructing that SM Entertainment be acquired 'peacefully.'" They continued, "To block Hybe’s public tender offer, he permitted price manipulation through on-market purchases, bearing the greatest responsibility and standing to benefit the most as the group’s leader, making his culpability extremely high."
They further emphasized, "When defendants collude to artificially raise and fix share prices through large-scale on-market purchases, it unjustly affects the market and undermines trust in the capital markets, which must be strictly punished. To prevent future market disruption and protect ordinary investors, it is essential to impose severe penalties and establish sound order."
However, Kim’s defense argued that the prosecution’s case was unfounded and insisted on his innocence. His attorney countered, "This case stems from a fundamental misunderstanding of the stock market, and the alleged price manipulation cannot be established. There were no discussions about artificial intervention, nor is there any evidence of illegal price manipulation in the defendant’s actions."
In his final statement, Kim Beom-soo asserted, "While running Kakao Corporation, I have never once sought personal gain through illegal or dishonest means. It is hard to accept the claim that I ordered price manipulation to block Hybe’s tender offer or that I gave instructions to acquire SM Entertainment at any cost."
welcome@fnnews.com Jang Yoo-ha Reporter