South Korean court clears Kakao founder of stock manipulation charges

By Heekyong Yang and Heejin Kim

SEOUL – A South Korean court on Tuesday cleared Kakao Corp’s billionaire founder Kim Beom-su of stock manipulation charges, sending shares of the country’s leading chat app operator up 5%.

The tech mogul was arrested in July last year on charges that he was involved in the manipulation of SM Entertainment’s 2023 stock price to prevent rival Hybe’s acquisition. He was released on bail in October 2024.

In August, prosecutors requested a 15-year prison sentence and a 500 million won fine.

Kim thanked the court for the decision and said, “I hope this will be an opportunity for Kakao to escape, at least a little, from the shadow of stock price and market manipulation.”

Since launching the popular messaging app KakaoTalk in 2010, Kim has risen to fame in South Korea’s digital industry by building Kakao’s affiliate group (worth 94 trillion in assets worth Korea) from scratch.

Kakao is South Korea’s largest messaging app, used by nearly 50 million Koreans for a variety of businesses, from gaming to shopping to banking to taxi-hailing.

Cocoa shares traded up 5.1% following the court decision.

“The case will most likely go to the Supreme Court, but today’s decision can be seen as a degree of mitigation of legal risks, with Kim being cleared of all charges,” said Kim Dong-woo, an analyst at Kyobo Securities.

The outcome of the case against Kim could have jeopardized Kakao’s control over its online banking arm, KakaoBank; because the country’s financial rules restrict people convicted of financial crimes from owning more than 10% of shares in a bank.

The high-profile tech entrepreneur is Kakao Corp’s largest shareholder, with a 24% stake controlled by him and affiliates.

Kakao was not immediately able to comment on the decision.

This article was generated from an automated news agency feed without modifications to the text.