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Prosecutors seek 15 years in prison for Kakao founder over SM acquisition

Published: 29 Aug. 2025, 18:27 Updated: 29 Aug. 2025, 18:31

Kim Beom-su, founder of tech giant Kakao Corp., arrives at the Seoul Southern District Court in the capital on Aug. 29, to attend the final trial of his stock manipulation trial. [YONHAP]

Prosecutors have requested a 15-year prison sentence for Kim Beom-su, founder of Kakao and chair of its management innovation committee, over allegations that he conspired to manipulate stock prices in a bid to block HYBE's takeover attempt of SM Entertainment.

During closing arguments at the Seoul Southern District Court on Friday, prosecutors also sought a fine of 500 million won ($360,000).

A 12-year prison sentence and a 500 million won fine were also requested for Bae Jae-hyun, former chief investment officer of Kakao. Seven-year prison terms and the same fines were further sought for Kakao Entertainment CEO Kim Sung-soo, former Kakao CEO Hong Eun-taek, former Kakao investment strategy head Kang Ho-jung and One Asia Partners President Kim Tae-young.

Prosecutors also requested 10 years in prison and a 500 million won fine for Ji Chang-bae, chairman of One Asia Partners.

The prosecution argued that Kakao engaged in stock manipulation to obstruct HYBE’s tender offer for SM Entertainment, saying, “This case stemmed from the defendants’ greed to secure control of SM without attracting public criticism. Strict punishment is necessary to establish fairness in the capital market.”

“As the de facto head of the Kakao Group, he was the ultimate beneficiary of the scheme,” they said of Kim. “He repeatedly instructed his executives to pursue SM’s acquisition ‘peacefully,’ approved stock manipulation measures and orchestrated the crime in a calculated manner.”

Kakao founder Kim Beom-su walks into Seoul Southern District Court in Yangcheon District, southern Seoul on July 22, 2024. [JOONGANG ILBO]

Kim’s defense rejected the charges, calling the indictment “an excessive stretch by prosecutors” and insisting that he engaged in legitimate management activities.

“At no point did the defendant consider using illegal means such as stock manipulation to acquire SM,” said his attorney. “He had no connection with One Asia Partners in this matter.”

“The purchases were not made to block HYBE’s tender offer,” said Kim, also denying the accusations in court. “Rather, we anticipated a price surge in SM shares if HYBE’s bid failed.” He also rejected prosecutors’ claim that he had consistently pushed for SM’s acquisition.

According to the indictment, Kim conspired with Bae and One Asia Partners in February 2023 to manipulate SM’s share price above HYBE’s tender offer price, carrying out more than 300 instances of high-priced purchases and volume absorption. Prosecutors allege that through One Asia Partners, Kim acquired SM shares worth 110 billion won across 363 transactions.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY OH SO-YEONG [[email protected]]