Prosecutors also sought a 10-year prison sentence on appeal for former Kakao Entertainment CEO Kim Sung-su, who was indicted on charges of acquiring an ailing drama production company at an inflated price.
On Apr. 28, at the appellate sentencing hearing of Kim's case on breach of trust under the Act on the Aggravated Punishment of Specific Crimes, held before the Seoul High Court Criminal Division 3 (presiding judge Lee Seung-han, senior judge), prosecutors said, "As in the original demand, please sentence the former CEO to 10 years in prison and a forfeiture of 1.25 billion won."
For Lee Jun-ho, former head of investment strategy at Kakao Entertainment, indicted on the same charge, prosecutors sought eight years in prison.
Prosecutors argued, "The defendants neutralized internal control procedures during the acquisition of the drama production company, proceeded without external review, and concealed the crime."
By contrast, the former CEO Kim said, "The prosecutor sees the acquisition as having been carried out to harm the company, but that reflects a failure to properly understand the structure of the content industry," adding, "There was no illegality or misconduct."
Kim and others were brought to trial on charges of conspiring to have Kakao Entertainment buy the drama production company "Baram Pictures," which was effectively owned by then-division head Lee, at an inflated price in 2020, causing 31.9 billion won in losses.
Investigators found that the former division head Lee gained about 31.9 billion won in profit from the sale of "Baram Pictures," and that the former CEO Kim received about 1.25 billion won in return.
Lee is also accused of having used 1.05 billion won of the 6.05 billion won that "Baram Pictures" received from another production company as planning and development fees for private purposes, including real estate purchases.
Earlier, the court of first instance acquitted the former CEO Kim, saying it was difficult to conclude that the company had suffered actual losses based solely on the evidence submitted, and sentenced the former division head Lee to two years in prison, suspended for three years, recognizing only the embezzlement charge under the Act on the Aggravated Punishment of Specific Crimes.