Billionaire Kakao founder cleared in stock manipulation case
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Kakao Corp founder Brian Kim speaks to the media as he leaves the Southern District Court in Seoul, South Korea.
PHOTO: BLOOMBERG
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- Brian Kim, Kakao Corp founder, was acquitted of stock manipulation charges related to the SM Entertainment acquisition.
- The Seoul court found insufficient evidence to support prosecutors' allegations of market manipulation by Kakao.
- Kim expressed gratitude, hoping the acquittal helps Kakao recover from the stock manipulation allegations.
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SEOUL - A South Korean court dismissed the stock manipulation case against Kakao Corp founder Brian Kim, clearing the billionaire of charges that marred his reputation as an internet pioneer.
Prosecutors had sought a 15-year prison term and a 500 million won (S$454,500) fine for Mr Kim, accusing him of rigging the stock price of K-pop powerhouse SM Entertainment in a high-stakes acquisition battle with rival Hybe.
In its ruling on Oct 21, the Seoul Southern District Court said prosecutors did not provide sufficient evidence for their allegations and acquitted Mr Kim of the charges. The panel of three judges said it is difficult to conclude that Kakao’s purchase of SM shares was aimed at manipulating the market. The verdict was read out after a hearing that lasted a little over half an hour.
Kakao shares extended gains to as much as 7 per cent in Seoul trading, its biggest intraday rise in more than a month, after the ruling.
“I would like to express my gratitude to the court for carefully reviewing the case over a long period of time and reaching this conclusion,” Mr Kim told reporters outside the court. “I hope this decision will serve as an opportunity for Kakao to move, even slightly, out of the shadow of allegations of stock manipulation and price rigging that have lingered over the company.”
Mr Kim, who has a net worth of about US$4.9 billion (S$6.35 billion) according to the Bloomberg Billionaires Index, was relieved after the acquittal ruling and seen smiling and talking to his lawyers.
His acquittal offers an opening to rebuild his tech empire after years of legal and reputational setbacks. It removes a major issue that had clouded his influence and investor confidence in one of South Korea’s most influential internet platforms.
With the case behind him and Kakao, the company led by chief executive officer Shina Chung can refocus on stabilising its sprawling businesses – from messaging and fintech to mobility and entertainment – while restoring public trust after internal turmoil and regulatory scrutiny eroded its standing in recent years. Its services permeate daily life for many of the country’s 52 million people.
Mr Kim, Kakao’s largest shareholder, had been accused of orchestrating trades worth 240 billion won in early 2023 to inflate SM’s share price, fend off Hybe’s bid, and secure Kakao’s control of the K-pop label. BLOOMBERG
