'SM Entertainment Market Manipulation' Allegation: "Acquittal Overturned" — Kakao's Kim Beom-su Sentenced to 15 Years in Prison at Second Trial

*This content was translated by AI.

The Prosecution Service has requested a 15-year prison sentence for Kim Beom-su, head of Kakao's Future Initiative Center, even in the second trial. The center was brought to trial on suspicion of conspiring to manipulate stock prices during the acquisition of SM Entertainment and was acquitted in the first trial.

According to NEWSIS on the 23rd, at the second-trial hearing for Kim Beom-su and others on charges of violating the Capital Markets Act, presided over by the Seoul High Court Criminal Division 4-1 (Presiding Judge Kim In-gyeom, Judges Sung Ji-yong and Jeon Ji-won), the Prosecution Service requested that the court sentence Kim to 15 years in prison and impose a fine of 500 million won.

Previously, during the first trial, the Prosecution Service also requested the maximum penalty under the Capital Markets Act for Kim: 15 years in prison and a fine of 500 million won.

Kim was brought to trial on charges of conspiring with private equity funds such as One Asia Partners to manipulate stock prices by setting and fixing share prices higher than the public offer price of 120,000 won during HYBE's acquisition of SM Entertainment in February 2023, in an effort to obstruct the public tender offer from rival HYBE.

In October last year, the first trial court acquitted Kim.

The court ruled that Lee Jun-ho, former head of Kakao Entertainment's Investment Strategy Division, whose testimony was presented by the Prosecution Service as virtually the only key evidence, "reversed his previous statements and made testimonies consistent with the intentions of law enforcement authorities to avoid being a target of investigation." The court further stated that "the testimony was inconsistent, contradicted common sense, and there was sufficient reason for him to provide false testimony."

Additionally, the court explained that "even when examining all high-price purchase orders and order cancellations, there is insufficient grounds to conclude they constitute market-manipulating orders," and that "they were not suitable for achieving the purpose of artificially manipulating and fixing stock prices at a high level."

The Prosecution Service appealed against this ruling. In the second trial, the Prosecution Service has argued that the original court made errors in fact-finding and misinterpretation of law by omitting key evidence such as statements intended to support stock prices and messages related to the division of roles in market manipulation.

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*This content was translated by AI.