Kim Beom-su, Kakao's Future Initiative Center head, appeared at Seoul High Court on the 22nd at 3:37 PM for his appeal hearing on stock price manipulation charges related to SM Entertainment. Kim and former Kakao investment executives are accused of purchasing large quantities of SM Entertainment shares in February 2023 to drive the stock price above HYBE's tender offer price of 120,000 won. Kim's defense argued he opposed the SM Entertainment acquisition and that stock purchases aimed only to match HYBE's stake. Kim received a first-instance acquittal on capital markets law violations.
Defense Claims Kim Opposed SM Entertainment Acquisition
Kim's legal team presented arguments that Kakao's SM Entertainment stock purchases in February 2023 lacked price manipulation intent. According to the defense, Kim expressed opposition to acquiring SM Entertainment during multiple investment discussions held by Kakao management in January and February 2023, citing concerns about public criticism of conglomerate expansion.
The defense stated that SM Entertainment initially resisted acquisition approaches, prompting Kakao to shift its strategy toward securing partial stakes and establishing a business cooperation agreement with SM Entertainment. When HYBE launched its tender offer to acquire SM Entertainment shares, Kakao purchased stocks on February 28 solely to secure a stake equal to HYBE's position, the defense argued.
Prosecution Maintains Price Manipulation Intent Allegation
The prosecution argued at the first hearing last month that Kakao demonstrated price manipulation intent. Prosecutors claim Kakao published messages hinting at SM Entertainment acquisition plans to boost the stock price, then deployed investment funds on the 28th to fix the price above the tender offer level through actual purchases.
Court Schedules Witness Examination for August 26
Following the defense's arguments, the court asked prosecutors whether evidence exists of collusion between Kakao and One Asia during the SM Entertainment stock purchase process. Prosecutors responded that while no recordings exist, testimony from Lee Jun-ho, former head of Kakao Entertainment's investment strategy division, is available.
The court designated Lee as a witness and scheduled witness examination for August 26.
FAQ
What charges does Kim Beom-su face regarding SM Entertainment stocks?
Kim Beom-su is accused of manipulating SM Entertainment's stock price in February 2023 by purchasing large quantities of shares using Kakao and Kakao Entertainment funds to drive the price above HYBE's tender offer price of 120,000 won, thereby obstructing HYBE's public acquisition attempt.
What did Kim Beom-su's defense argue at the appeal hearing on the 22nd?
Kim's defense argued that he opposed the SM Entertainment acquisition during management discussions in January and February 2023 due to concerns about conglomerate expansion criticism. The defense stated Kakao's stock purchases on February 28 aimed only to secure a stake equal to HYBE's position, not to manipulate stock prices.
