Prosecutors appeal court acquittal of Kakao founder on stock manipulation charges

Kim Beom-su, founder of tech giant Kakao Corp., speaks to reporters as he leaves the Seoul Southern District Court in Seoul, Oct. 21, after the court acquitted him of stock manipulation charges. Yonhap

Prosecutors have appealed the recent court acquittal of Kim Beom-su, founder of tech giant Kakao Corp., on stock manipulation charges related to the company's takeover of K-pop agency SM Entertainment, officials said Tuesday.

The Seoul Southern District Prosecutors Office recently filed an appeal against the not-guilty ruling on Kim, court officials said, claiming factual and legal misunderstandings behind the decision.

Last week, the Seoul Southern District Court acquitted Kim, now head of Kakao's Future Initiative Center, of 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.

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 at the time.

In addition, it ruled there was not sufficient basis to support the prosecution's argument that the SM takeover was essential for Kakao at the time.

Prosecutors claimed that Kakao engaged in price fixing to block HYBE's takeover of SM, causing losses to many innocent individual investors.

Prosecutors also asserted that the court ruling also failed to take into account records of phone conversations among Kakao officials and other key evidence.

The appeal sends the case to the Seoul High Court for another round of trial.