Chairperson Kim Beom-soo, founder of Kakao, received a 15-year prison sentence recommendation in the first trial of the SM Entertainment stock manipulation case on the 29th. It has been about a year since his arrest and indictment in August of last year. Typically, sentencing occurs within 3 to 4 weeks after the conclusion hearing.
On this day, the 15th Criminal Division of the Seoul Southern District Court, presided over by Director General Yang Hwan-seung, held the conclusion hearing for Chairperson Kim's allegations of violating the Capital Markets Act. The prosecution requested the court to impose a 15-year prison sentence and a fine of 500 million won on Chairperson Kim.
The prosecution noted, "Due to this stock price manipulation, SM Entertainment's stock prices fluctuated significantly, causing great harm to ordinary investors." They also stated, "HYBE and SM Entertainment missed the opportunity to strengthen their global competitiveness by merging, and Kakao misused the capital that should have been utilized for sound management for stock price manipulation."
Chairperson Kim denied the allegations during the defendant questioning on the same day, stating that he had never given any instructions to raise SM Entertainment's stock prices. Typically, defendant questioning is completed before the conclusion hearing, but it was conducted during the conclusion hearing due to Chairperson Kim's health issues which had made his court attendance difficult.
The prosecution recommended a 12-year prison sentence and a fine of 500 million won for Bae Jae-hyun, the former head of investment at Kakao, who was identified as an accomplice of Chairperson Kim. Additionally, they recommended 9 years in prison and a fine of 500 million won for former Kakao Entertainment CEO Kim Sung-soo, and 7 years in prison and a fine of 500 million won each for Hong Eun-taek, former CEO of Kakao, and Kang Ho-jung, head of Kakao's investment strategy.
Meanwhile, Chairperson Kim was arrested and indicted on August 8th of last year. He faces allegations of instructing the accumulation of SM Entertainment shares to inflate the stock price to hinder competitor HYBE's public takeover during the acquisition process in February 2023. Chairperson Kim has been out on bail and has been receiving trial without detention since his release in October of last year.