South Korean prosecutors have asked an appeals court to jail Kakao Corp. founder Kim Beom-su for 15 years over the alleged manipulation of SM Entertainment‘s share price.
The request was made at the final hearing of Kim’s appeal at the Seoul High Court on Wednesday (September 23).
It matches the sentence prosecutors sought in full at Kim‘s first trial, which ended in his acquittal in October 2025.
Prosecutors also asked the court to fine Kim KRW 510 million (USD $377,000), according to Yonhap News Agency, via Reuters.
They requested a 12-year term and a fine of the same size for Bae Jae-hyun, Kakao’s former chief investment officer, Seoul Economic Daily reported.
Fines of KRW 500 million each were sought against Kakao Corp. and Kakao Entertainment, which face charges under South Korea’s “dual punishment” rule, which extends criminal liability to a company for offenses committed by its executives.
Prosecutors sought a nine-year term for Kim Sung-soo, the former CEO of Kakao Entertainment, and seven-year terms for former Kakao CEO Hong Eun-taek and former Kakao investment strategy head Kang Ho-jung.
“The lower court’s ruling contains errors in its findings of fact and in its application of the law, and the acquittals of the defendants should be overturned,” prosecutors told the Seoul High Court, as quoted by Seoul Economic Daily.
Kim, who heads Kakao’s Future Initiative Center, was indicted over the purchase of around KRW 240 billion (approximately $177 million at current exchange rates) of SM Entertainment shares across 553 transactions in February 2023.
Prosecutors say those purchases were made to hold SM’s share price above the KRW 120,000 per share that HYBE had offered in its tender offer for the K-pop agency.
Kim also faces a charge of failing to disclose an 8.16% holding in SM Entertainment, which prosecutors say was concealed through private equity firm One Asia Partners.
HYBE‘s bid for SM fell through in March 2023, and Kakao and Kakao Entertainment went on to secure a 39.9% stake in the agency behind aespa, EXO, and NCT.
The first-trial court cleared Kim, Kakao Corp., and his co-defendants on October 21, 2025.
“Based on evidence from the prosecution, it is difficult to recognize that there were discussions to collude in stock manipulation,” the Seoul Southern District Court said, as quoted by The Korea Herald.
Prosecutors filed their appeal on October 28, 2025, citing “misinterpretation of facts and misapplication of the law,” Korea JoongAng Daily reported.
The Seoul Southern District Prosecutors’ Office said the case involved “illegal stock price manipulation” aimed at interfering with HYBE’s tender offer, and argued that investors had been misled into expecting a further rise in SM’s share price.
The appeal opened at the Seoul High Court on June 24, and the bench later declined a prosecution request to call HYBE chairman Bang Si-hyuk as a witness.
Bang had been accepted as a witness at the first trial but did not appear.
At the first trial, prosecutors argued that Kim bore the greatest responsibility of the defendants.
“AS THE DE FACTO HEAD OF THE KAKAO GROUP, HE WAS THE ULTIMATE BENEFICIARY OF THE SCHEME.”
PROSECUTORS, AT THE FIRST TRIAL OF KIM BEOM-SU
Kim has denied the allegations throughout, and Kakao declined to comment on the prosecutors’ request, Reuters reported.
“The purchases were not made to block HYBE’s tender offer,” Kim told the first-trial court, as quoted by Korea JoongAng Daily. “Rather, we anticipated a price surge in SM shares if HYBE’s bid failed.”
In his closing statement on Wednesday, Kim told the appeal court that he had never instructed anyone to use illegal or improper methods, and said prosecutors had still not set out when or where he was supposed to have ordered the manipulation, or how he was supposed to have colluded with One Asia Partners, Asia Today reported.
The outcome also carries consequences for Kakao‘s stake in KakaoBank.
Under South Korean law, an entity convicted of a financial crime cannot own more than 10% of a bank, and Kakao holds around 27% of the lender.
The Seoul High Court is due to deliver its ruling on November 20.Music Business Worldwide