Prosecutors have requested a 15-year prison sentence for Kim Beom-soo, the founder of Kakao, who was acquitted in the first trial on charges of manipulating stock prices during the acquisition of SM Entertainment. The prosecution argued that the first trial failed to properly assess evidence showing an intent to block HYBE's public offering.
On September 23, during a hearing at the Seoul High Court's Criminal Division 4-1, presided over by Judges Kim In-gyeom, Seong Ji-yong, and Jeon Ji-won, prosecutors requested the lengthy sentence for Kim, who is accused of violating capital market laws. They also sought a 12-year sentence for Bae Jae-hyun, former head of Kakao's investment division, and fines of 500 million won for both Kakao and Kakao Entertainment. Additionally, prosecutors requested the confiscation of approximately 127.2 billion won from Kim.
Kim and others are accused of manipulating SM's stock price to keep it above the public offering price of 120,000 won during the competition for control of the company in February 2023. Prosecutors allege that Kakao colluded with One Asia Partners to execute large-scale stock purchases and high-priced buy orders to influence the market.
Prosecutors stated, "The lower court ignored clear evidence that aligns with the criminal facts," arguing that there were misinterpretations of facts and legal principles. They cited KakaoTalk conversations discussing the blocking of the public offering and orders to buy when SM's stock price fell below 120,000 won. They contend that the purpose of market manipulation should be assessed based on individual trading orders as well as the context of the acquisition competition and a series of transactions.
In the previous trial, the court found it difficult to recognize collusion and market manipulation by Kim and Bae, concluding that the mere fact that Kakao's large-scale purchases affected SM's stock price was insufficient to constitute market manipulation.
The first trial judges determined that there was not enough evidence to support claims that the timing and method of buy orders were intended to artificially maintain a high stock price. They also deemed the testimony of Lee Jun-ho, former head of investment strategy at Kakao Entertainment, to lack consistency and credibility.
In the appeal, the prosecution and defense are at odds over whether Kakao's stock purchases were aimed at securing shares or were part of a scheme to manipulate the market to block HYBE's public offering.
* This article has been translated by AI.
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