15-year prison term sought for Kakao founder in SM stock case

Prosecutors sought a 15-year prison term for Kakao founder Kim Beom-su, Wednesday, during an appeal over his alleged involvement in inflating SM Entertainment's stock price during a fierce 2023 takeover battle for the K-pop agency.

In a final hearing at the Seoul High Court, prosecutors asked the court to sentence Kim, head of Kakao’s Future Initiative Center, to 15 years in prison and impose a 500 million won ($370,000) fine for violating the Financial Investment Services and Capital Markets Act.

They also requested a 12-year prison term and a 500 million won fine for Bae Jae-hyun, Kakao’s former chief investment officer. Prosecutors sought 500 million won fines each for Kakao and Kakao Entertainment.

Kim and other defendants are accused of keeping SM Entertainment’s share price above HYPE’s tender-offer price in February 2023 to obstruct the rival entertainment company’s acquisition attempt.

The prosecution argued that the lower court failed to properly assess clear evidence supporting the charges and misapplied the law. It urged the appellate court to overturn the defendant’s acquittals.