Prosecutors Again Seek 15 Years for Kakao Founder in SM Entertainment Stock Case

South Korean prosecutors are again seeking a 15-year prison sentence for Kakao founder Kim Beom-su as an appeals court considers allegations of stock manipulation tied to Kakao’s 2023 acquisition battle for SM Entertainment.

At a final hearing before the Seoul High Court on September 23, prosecutors asked the court to sentence Kim to 15 years in prison and impose a ₩500 million fine for alleged violations of South Korea’s Capital Markets Act.

The request matches the sentence prosecutors sought during Kim’s first trial, which ended in an acquittal.

The case stems from Kakao’s competition with HYBE for control of SM Entertainment in February 2023. Prosecutors allege that Kakao and its associates purchased large amounts of SM shares at prices above HYBE’s ₩120,000-per-share tender offer in an effort to prevent HYBE from securing control of the company.

Kim has denied directing illegal activity or conspiring to manipulate SM’s share price.

The first-trial court acquitted Kim and other defendants, finding that large-scale purchases during the tender-offer period could not, by themselves, establish unlawful market manipulation.

Prosecutors challenged that conclusion during the appeal, arguing that the lower court failed to properly evaluate evidence supporting the charges and misapplied the law.

Former Kakao investment chief Bae Jae-hyun, who was charged in the same case, also faces a renewed prosecution request for 12 years in prison and a ₩500 million fine. Prosecutors additionally requested ₩500 million fines for Kakao and Kakao Entertainment.

The Seoul High Court is scheduled to deliver its appellate ruling on November 20.