Court acquits Kakao founder of stock manipulation charges
Kim Beom-su, center, founder of tech giant Kakao, appears at the Seoul Southern District Court to attend the sentencing hearing of his trial on stock manipulation charges, Tuesday. Yonhap
A local court on Tuesday acquitted Kim Beom-su, founder of tech giant Kakao, of charges of stock manipulation related to the company's takeover of K-pop agency SM Entertainment.
Kim, now head of Kakao's Future Initiative Center, had been indicted on charges of violating the Capital Market Act by inflating SM share prices above rival Hybe's tender offer price in order to block its takeover of SM in 2023.
The Seoul Southern District Court acquitted him of the charge, saying that just because Kakao's mass purchase of SM shares affected their price, it could not be seen as price manipulation.
Based on the time intervals between Kakao's purchases of SM shares, it was difficult to conclude the company intended to fix the share price above the market price, the bench said.
In addition, it ruled there was not enough basis to support the prosecution's argument that the SM takeover was essential for Kakao at the time.
The bench rejected as false testimony from Lee Joon-ho, former head of investment strategy at Kakao Entertainment, that Kakao had colluded with OneAsia Partners to manipulate SM's stock prices.
"Lee was investigated not only over this case but also over a separate case, and was under extreme psychological pressure following multiple warrant requests for his arrest," the bench said. "The motives and reasons are clear (for giving false testimony) in order to free himself from investigations and trials."
The bench chastised the prosecution for what it characterized as excessive investigations that resulted in a distortion of the truth.
"Had it not been for Lee's testimony, the defendants would not be seated here, and some of them would not have been arrested," it said.
Prosecutors had sought a 15-year prison term for Kim, as well as a 500 million-won ($351,000) fine.
Kim thanked the bench as he left the court after the verdict.
"I hope this will be an opportunity for Kakao to come out at least a little from under the shadow of stock manipulation and price manipulation," he told reporters.