South Korean Court Clears Kakao Founder Of Stock Manipulation Charges
Shares of Kakao Corp, South Korea’s dominant chat app operator, surged 5 per cent on Tuesday (Oct 21) after a court cleared billionaire founder Kim Beom-su of stock manipulation charges.
Kim, who was arrested in July last year over allegations of manipulating the stock price of SM Entertainment in 2023 to prevent a competitor, Hybe, from acquiring it, was released on bail in October 2024. Prosecutors had sought a 15-year jail term and a fine of 500 million won (US$350,000).
“I hope this serves as an opportunity for Kakao to move, even slightly, out of the shadow of (the allegations) of stock price and market manipulation,” Kim said, thanking the court for its ruling.
The verdict is likely to be appealed to the Supreme Court, but analysts noted it reduces legal risks for the tech tycoon. “Today’s ruling can be seen as easing legal risks to some extent as Kim was cleared of all charges,” said Kim Dong-woo, an analyst at Kyobo Securities.
Kim shot to fame in South Korea’s digital industry by building Kakao’s group of affiliates, now worth 94 trillion won (US$66.13 billion) in assets, after launching KakaoTalk in 2010. Kakao is used by nearly 50 million South Koreans and operates businesses across gaming, shopping, banking, and taxi-hailing.
The case carried broader implications, as a conviction could have jeopardised Kim’s control of KakaoBank, due to South Korea’s regulations limiting bank ownership for those convicted of financial crimes. Kim remains the largest shareholder of Kakao Corp, controlling a 24 per cent stake with affiliated entities.
Kakao was not immediately available for comment on the court’s decision.
Reuters
