Prosecution Appeals 'SM Stock Manipulation Allegation' Acquittal of Kakao's Kim Beom-soo

The Seoul Southern District Prosecutors' Office filed an appeal on the 28th against the first trial acquittal of Kim Beom-soo, the head of the Future Initiative Center (former Chairman of the Management Innovation Committee) of Kakao, who was indicted on charges of stock manipulation related to SM Entertainment.

The prosecution stated, "There are reasons for factual misjudgment and legal misunderstanding," and announced that it has appealed the first trial verdict against Kim and others indicted for violating the Capital Markets Act.

The prosecution emphasized, "This case involves Kakao using illegal means such as fixing stock prices to obstruct Hive's legitimate public purchase for the acquisition of SM Entertainment, causing losses to many innocent general investors who misjudged the rise in stock prices due to illegal stock manipulation."

The prosecution pointed out that objective evidence such as messages and recorded calls from Kakao officials discussing stock manipulation to obstruct Hive's public purchase were not sufficiently considered in the first trial. They also mentioned that there are recorded calls where they coordinated their responses after the investigation began.

Meanwhile, regarding the part where the first trial court mentioned, "It seems that the key witness made false statements due to pressure from separate investigations," the prosecution added, "We take this very seriously, regardless of the judgment, and will establish institutional preventive measures."

Previously, the first trial court of the Seoul Southern District Court acquitted Kim and others on the 21st, stating that it could not recognize stock manipulation solely based on the fact that Kakao's large-scale purchases during Hive's public purchase period affected the market.

The court determined that there was a prospect that SM Entertainment's stock price would rise even after the end of Hive's public purchase period, and found the defendants' statements that Kakao's stock purchases were for securing volume rather than stock manipulation to be reasonable.

With this prosecution appeal, the SM Entertainment stock manipulation allegation case will undergo a second trial at the Seoul High Court.