Kim Sung-su, former head of Kakao Entertainment, who was brought to trial on charges of acquiring an insolvent drama production company at an inflated price, was also found not guilty on appeal.
The Seoul High Court Criminal Division 3 (presiding judge Lee Seung-han, senior judge) on the 11th acquitted former CEO Kim of charges including breach of trust and bribe-taking under the Act on the Aggravated Punishment of Specific Economic Crimes, as in the first trial.
Former CEO Kim is accused of conspiring in 2020 to have Kakao Entertainment acquire the drama production company Baram Pictures at an inflated price, causing the company 31.9 billion won in losses.
The issue in this case was whether Kakao Entertainment suffered a loss due to the acquisition of Baram Pictures. However, the court found it difficult to conclude that this fact was clearly proven based solely on the evidence submitted by the prosecutor.
The court said, "To determine whether Kakao Entertainment suffered a loss, the proper value of Baram Pictures must be specifically calculated," and added, "But based on the materials presented in this case alone, it is difficult to know what the appropriate amount for Baram Pictures is."
The court also viewed that Kakao Entertainment acquired Baram Pictures based on an appropriate business judgment. The court said, "Around April 2018, Kakao Entertainment planned to build a content production and distribution platform jointly with Kakao," and added, "To that end, it recruited former CEO Kim Sung-su, who had been the CEO of a competitor, and moved into the media business as a latecomer."
From Kakao Entertainment's standpoint, there was a recognized business need to acquire a production company with famous writers under contract to achieve its management goals.
The court also did not accept the charge that former CEO Kim received 1.2 billion won from former Kakao Entertainment head of investment strategy Lee Jun-ho in exchange for arranging the acquisition of a production company. The reason was that it was hard to see that Kim received money after an improper solicitation. Even so, the court said, "It is very suspicious whether the exchange of money was the price for an improper solicitation."
As for the former division head, who is charged with embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes, the first-trial sentence of two years in prison suspended for three years was upheld. However, as in the first trial, the charge of bribing for breach of trust by giving money to former CEO Kim along with a request to acquire the production company resulted in an acquittal.
The former division head is accused of embezzling 1.05 billion won out of 6 billion won that Baram Pictures received in 2017 from another content production company as drama planning and development expenses, using it for personal purposes such as purchasing real estate.