Prosecutors on the 28th appealed the first trial verdict that found Kakao founder Kim Beom-su not guilty on all counts in the "SM Entertainment stock manipulation charges." Kim received a not-guilty verdict on the 21st, and prosecutors filed their notice of appeal with the court on the last day of the seven-day appeal window. In legal circles, some noted, "Appeals are generally filed a day or two before the deadline, so this case is unusual."
The Seoul Southern District Prosecutors' Office sent materials to the press that day stating, "We appealed the first trial not-guilty verdict for founder Kim Beom-su." Prosecutors said, "We filed an appeal due to factual misapprehensions and misinterpretations of the law in the first trial not-guilty verdict." They added, "This case is an illegal market-rigging offense in which Kakao used unlawful means such as price-fixing to obstruct HYBE's tender offer and saddled numerous retail investors, who were misled to believe the price would rise, with losses." They also said, "(The first trial court) contradicted numerous pieces of evidence or omitted judgments on them."
Earlier, during the proceedings, prosecutors sought a 15-year prison sentence for founder Kim Beom-su. However, the Criminal Agreement Division 15 of the Seoul Southern District Court (Presiding Judge Yang Hwan-seung), which handled the first trial, ruled on the 21st, "We find founder Kim not guilty." The first trial verdict came 1 year and 8 months after Kim was indicted in Aug. last year.
At the time, the court said Kakao's purchase of SM Entertainment shares during HYBE's tender offer period, amid competition to acquire SM Entertainment, was a legitimate open-market purchase and could not be deemed market manipulation under the Financial Investment Services and Capital Markets Act.
In particular, the court said, "It is difficult to trust the testimony of a person surnamed Lee, a former Kakao Entertainment executive, which is the prosecution's key evidence." It continued, "By pressuring suspects or related parties through a separate investigation to extract statements, the prosecution's investigative method produced an unjust result that distorted the truth."
In response, while appealing that day against founder Kim, prosecutors said, "We take seriously the first trial court's unusual remark that the key witness appears to have given false testimony to avoid pressure from a separate investigation, and we will prepare institutional safeguards going forward."
Meanwhile, the current administration holds that prosecutors should not mechanically appeal cases that resulted in not-guilty verdicts. President Lee Jae-myung said at a Cabinet meeting on the 30th of last month to Minister Jeong Seong-ho, "Prosecutors indict cases that won't succeed, and when not-guilty verdicts come out, they appeal to avoid accountability, causing the public pain." Minister Jeong said, "We should amend the Criminal Procedure Act to prohibit appeals or petitions for review to the Supreme Court except in cases where clear legal issues are contested or in very grave and exceptional circumstances."
Subsequently, on the 1st of this month, the Democratic Party of Korea introduced a bill to amend the Criminal Procedure Act to bar prosecutors from petitioning the Supreme Court if, after appealing a first trial court's not-guilty, dismissal (myeonso: case concluded without determining guilt or innocence), or dismissal of indictment ruling, the appellate court dismisses the appeal.