Kakao Corporation Sheds Stock Manipulation Stigma...“We Will Keep Moving Forward Without Stopping”

[Financial News] Kim Beom-soo, head of the Future Initiative Center and founder of Kakao Corporation, who was indicted on charges of manipulating the stock price of SM Entertainment Co., Ltd. (SM Entertainment), was acquitted in the first trial. As a result, Kakao Corporation has finally escaped the heavy burden of 'judicial risk' that has weighed on the group for nearly three years. The not-guilty verdict signals the resolution of the 'founder risk,' creating an environment where Kakao Corporation can resume its AI transformation and global growth strategies without obstacles.■The Lost Three Years...“Unable to Respond Nimbly to a Rapidly Changing Market. It Was Painful.”On the 21st, the 15th Criminal Division of the Seoul Southern District Court (Presiding Judge Yang Hwan-seung) acquitted Kim Beom-soo, who was charged with violating the FSCMA, stating, “It is difficult to conclude that there was intent to manipulate the market.”
This verdict is not just a legal relief for Kim Beom-soo personally. The ongoing trial surrounding Kim Beom-soo had raised concerns about the overall management stability of Kakao Corporation, and particularly acted as an invisible constraint on its financial subsidiaries and new business initiatives. However, the prevailing analysis is that this acquittal provides an opportunity for the group to restore trust and stabilize management.
Following the ruling, Kakao Corporation expressed gratitude for the court’s decision, stating, “We would like to reiterate that neither Kim Beom-soo nor any Kakao Corporation executives or employees discussed or attempted any illegal acts during the SM Entertainment acquisition process.”
Nevertheless, it remains a painful point that Kakao Corporation missed opportunities for global expansion and higher growth due to this incident. Since the controversy over 'SM stock price manipulation' erupted in February 2023, Kakao Corporation has not been able to recover its stock price to previous levels. At the time of the SM Entertainment acquisition battle, Kakao Corporation’s stock price was on the rise, reflecting high expectations for global expansion, but the legal scrutiny of the founder prevented the company from formulating a proper growth strategy. An industry insider commented, “It took three years to recover the stock price, and in hindsight, Kakao Corporation essentially lost three crucial years for global expansion.”
Kakao Corporation also expressed regret in an official statement, saying, “The group faced many difficulties during the two years and eight months of investigation and trial. In particular, it was painful that we could not respond swiftly to rapid market changes.” Kim Beom-soo also briefly commented after the verdict, “I hope this serves as an opportunity to move out from under the shadow of stock price manipulation and market rigging that has hung over Kakao Corporation.”■AI Growth Strategy Back on Track...New Business Initiatives AccelerateKakao Corporation’s new businesses, including its transition to an Artificial Intelligence (AI) platform, expanded mergers and acquisitions (M&A), and Stablecoin initiatives, are expected to gain momentum. With the resolution of the greatest uncertainty, industry observers widely expect that investor confidence will recover and strategic decision-making will become bolder and faster.
Kakao Corporation is currently pushing forward with AI-based platform innovation centered on KakaoTalk. Specifically, the company is advancing generative AI services across all offerings, including KakaoTalk, based on its proprietary AI technology, and accelerating the AI transformation of lifestyle platforms such as fintech and mobility. In addition, a dedicated Stablecoin task force has been launched, targeting this area as a key strategic focus.
Although Kim Beom-soo will step back from frontline management for health reasons, some predict that his strategic influence as founder will only grow at this inflection point, as competition in AI technology intensifies.
This verdict also brings relief to the financial sector. If Kim Beom-soo or Kakao Corporation had received a conviction with a fine or higher, it could have raised questions about the eligibility of KakaoBank and other financial subsidiaries as major shareholders. However, the acquittal has put such uncertainties to rest for now.
Meanwhile, CEO Jeong Shin-a stated in an internal announcement, “Kakao Corporation has consistently worked to restore public trust and improve its structure while facing complex issues such as judicial risks and shaken credibility. Although the process sometimes felt slow, we are moving forward, solving each problem one by one without stopping.”
yjjoe@fnnews.com Jo Yoon-joo, Joo Won-gyu Reporter