Prosecutors Request 15-Year Sentence Again for Beomsu Kim Over 'SM Stock Manipulation' in Appeal Trial

Prosecutors Seek to Overturn Acquittal in First Trial
Cite "Factual Misunderstanding" as Grounds for Appeal

Prosecutors have requested a 15-year prison sentence in the appeals trial for Kim Beom-su, founder of Kakao and Head of Kakao Future Initiative Center, who was acquitted in the first trial after being indicted on charges of stock price manipulation involving Kakao’s dealings with SM Entertainment.

On June 24, Kim Beom-su, Head of Kakao Future Initiative Center, attended the first hearing of the appeal trial for the violation of the Capital Markets Act held at the Seoul High Court in Seocho-gu. Photo by Yonhap News.

During the sentencing hearing held before the Criminal Division 4-1 of the Seoul High Court on the 23rd, prosecutors requested that Kim be sentenced to 15 years in prison and fined 500 million won. For Bae Jae-hyun, former Head of Investment at Kakao, who was indicted on related charges, they also requested 12 years in prison and a fine of 500 million won.

In accordance with the dual punishment rule, prosecutors also requested fines of 500 million won each for both Kakao and Kakao Entertainment. Other defendants, such as Kim Sung-soo, former CEO of Kakao Entertainment, were each requested to receive nine years of imprisonment. All these sentences are the same as those requested at the first trial.

Prosecutors argued that the first trial’s decision—that Kakao’s large-scale on-market purchases during HYBE’s tender offer period for SM could not be regarded as stock price manipulation—was due to factual misjudgment and misunderstanding of the law, and asked for the acquittal to be overturned. They asserted that Kakao had a need to prevent HYBE’s tender offer in order to acquire SM, and to do so, had engaged in large-scale on-market purchases.

On the other hand, Kim’s legal team contended that the not guilty verdict from the first trial should be upheld, arguing that there is no concrete evidence of illegal orders or collusion to manipulate the stock price. In his final statement, Kim claimed, “I have always believed that business growth must proceed in accordance with the law and principles, and in this case as well, I never gave any illegal orders,” again asserting the absence of concrete evidence. The appeals verdict is scheduled for November 20.

Previously, in February 2023, Kim and others were indicted on charges of manipulating SM stock prices to keep them higher than the tender offer price, with the intent to disrupt the rival company HYBE’s tender offer during the process of Kakao’s acquisition of SM.

In the first trial, both Kim and Bae were acquitted. The court determined that Kakao’s large-scale on-market purchases alone could not be definitively classified as stock price manipulation simply because they affected the stock price. Furthermore, the court held that there was insufficient evidence to conclude that the acquisition of SM’s management control by Kakao was absolutely necessary, or that there had been prior collusion to block the tender offer or manipulate the stock price.

This content was produced with the assistance of AI translation services.