Kim Beom-soo of Kakao Corporation Acquitted in First Trial Over Alleged SM Stock Manipulation

[Financial News] Kim Beom-soo, founder and Chairman of the Management Reform Committee at Kakao Corporation, who was indicted on charges of manipulating the stock price during the acquisition of SM Entertainment Co., Ltd. (SM Entertainment), was acquitted in the first trial.
The 15th Criminal Division of the Seoul Southern District Court, presided over by Chief Judge Yang Hwan-seung, acquitted Kim on June 21 of violating the Financial Investment Services and Capital Markets Act (FSCMA).
The court stated, "It is true that Kakao Corporation considered acquiring management control of SM Entertainment, but it is difficult to conclude that it was an unavoidable situation. Based solely on the evidence presented by the prosecution, it is also difficult to determine that there was any discussion of collusion regarding stock price manipulation."
Kim was brought to trial on charges of conspiring with One Asia Partners and others to manipulate the stock price of SM Entertainment during the acquisition process in February 2023. The prosecution alleged that they fixed the stock price above 120,000 won, the price offered in Hybe Co., Ltd.'s public tender, to block the rival's bid.
Prosecutors argued that Kim, as the group's top decision-maker, was informed of and approved the stock price manipulation plan in advance, and that executives systematically mobilized funds to carry out large-scale on-market purchases.
At the previous sentencing hearing, the prosecution stated, "Although the defendant, as the head of Kakao Corporation and final decision-maker, was informed of legitimate competitive methods, he continuously opposed them and instead ordered the acquisition of SM Entertainment to be carried out 'peacefully.'" The prosecution sought 15 years in prison and a fine of 500 million won for Kim.
welcome@fnnews.com Jang Yu-ha Reporter