South Korea prosecutors search 15-year jail time period for Kakao founder over alleged manipulation of SM Leisure inventory

Prosecutors have requested a 15-year jail sentence for Kim Beom-su, the founding father of South Korean tech big Kakao Corp., over his alleged function in an effort to control SM Leisure’s inventory value throughout a bidding struggle in opposition to Ok-pop big HYBE.

Kim was arrested and indicted final 12 months. Prosecutors alleged he coordinated a scheme in February 2023 to bid up the inventory value of SM Leisure above the 120,000 received per share that HYBE had supplied in its bid for SM.

Prosecutors say the scheme concerned funneling some KRW 240 billion ($172 million on the present trade charge) throughout greater than 300 particular person transactions, inflicting SM Leisure inventory to rise dramatically.

Round that point, SM’s shares briefly spiked from round KRW 75,000 per share to greater than KRW 147,000, earlier than falling again down once more. HYBE’s supply to purchase SM, a rival Ok-pop firm, fell by means of and Kakao Corp. tabled its personal bid. Kakao ultimately emerged because the winner within the bidding struggle, taking a 39.9% stake in SM Leisure.

Prosecutors made the request for the 15-year jail sentence throughout closing arguments in Kim’s trial on the Seoul Southern District Court docket on Friday (August 29). In addition they requested that Kim pay a advantageous of KRW 500 million ($359,000).

In line with Korea JoongAng Each day, prosecutors additionally requested for a 12-year sentence for former Kakao chief funding officer Bae Jae-hyun, and seven-year jail phrases for Kim Sung-soo, CEO of subsidiary Kakao Leisure, in addition to former Kakao CEO Hong Eun-taek, former Kakao funding technique head Kang Ho-jung and One Asia Companions President Kim Tae-young.

One Asia Companions is a non-public fairness fund administration agency with hyperlinks to Kakao that prosecutors allege was concerned within the scheme.

“Kim authorised the manipulation of SM Leisure’s inventory value by means of on-market purchases to be able to conceal Kakao Corp.’s intention to amass SM and block Hybe’s tender supply, and subsequently bears the best accountability,” prosecutors stated, as quoted by The Korea Herald.

“Because the de facto head of the Kakao Group, he was the last word beneficiary of the scheme.”

Prosecutors within the felony trial of Kim Beom-su

“Because the de facto head of the Kakao Group, he was the last word beneficiary of the scheme,” they stated. “He repeatedly instructed his executives to pursue SM’s acquisition ‘peacefully,’ authorised inventory manipulation measures and orchestrated the crime in a calculated method.”

Though Kakao Corp. is at present led by CEO Chung Shin-a, who additionally heads its Company Alignment Council, Kim stays the corporate’s largest shareholder with a 24.12% stake, based on The Korea Instances.

Kim’s attorneys rejected the allegations, calling them “an extreme stretch by prosecutors” and asserted the inventory purchases had been authentic.

“The purchases weren’t made to dam HYBE’s tender supply,” Kim informed the court docket, as quoted by JoongAng Each day. “Fairly, we anticipated a value surge in SM shares if HYBE’s bid failed.”

“At no level did the defendant think about using unlawful means reminiscent of inventory manipulation to amass SM,” an legal professional for Kim acknowledged. “He had no reference to One Asia Companions on this matter.”

A verdict within the case is predicted within the coming weeks, Bloomberg reported.Music Enterprise Worldwide