South Korean prosecutors have asked an appeals court to sentence Kakao founder Kim Beom-su to 15 years in prison over alleged stock-price manipulation linked to the technology company’s acquisition of K-pop agency SM Entertainment.
Prosecutors also asked the court to impose a fine of 510 million won ($377,000), Yonhap News Agency reported on Wednesday.
The prosecution is seeking to overturn a lower court ruling issued last year that cleared Kim of the stock-manipulation charges.
The appeals court is expected to deliver its ruling at a later date.
The case centres on Kakao’s 2023 acquisition of SM Entertainment, one of South Korea’s major entertainment companies and the agency behind several prominent K-pop acts.
Prosecutors allege that Kim and others manipulated SM Entertainment’s share price during the acquisition battle to prevent rival entertainment company Hybe from taking control of the agency.
Hybe, which represents global K-pop group BTS, had also been seeking to acquire SM Entertainment at the time.
Kim, widely known as Brian Kim, was arrested in July 2024 over the allegations and was later released on bail in October of the same year.
He has denied the allegations, saying he neither ordered nor tolerated illegal activity, according to previous statements from Kakao.
Kakao declined to comment on the latest request by prosecutors.
The legal case represents a major setback for the founder of one of South Korea’s most influential technology groups. Kim built Kakao and its affiliates after launching KakaoTalk, the company’s widely used messaging platform, in 2010.
KakaoTalk grew into one of South Korea’s dominant digital communication platforms and became the foundation for a broader technology and services group with interests spanning financial services, mobility, entertainment and other digital businesses.
The company’s expansion into financial services includes Kakao Bank, while its entertainment operations have made it a significant player in South Korea’s rapidly growing K-pop industry.
The stock-manipulation case has therefore drawn attention beyond the entertainment sector, with the outcome potentially affecting the reputation of Kakao and its founder as well as investor sentiment toward the company.
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Kakao shares fell 1.3 per cent in Seoul trading as of 0524 GMT on Wednesday following news of the prosecution’s request.
The latest development comes after the lower court’s decision to acquit Kim in 2025, prompting prosecutors to appeal the ruling and seek a prison sentence.
The appeals court must now determine whether the prosecution has established grounds to overturn the earlier decision and convict Kim on the stock-manipulation charges.
Kim’s legal team has maintained that he did not direct or approve any unlawful activity in connection with the acquisition.
The court’s eventual ruling will determine whether the allegations against the Kakao founder result in a criminal conviction and sentence.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
