Kakao founder acquitted of SM stock manipulation charges

A South Korean court has acquitted Kakao founder Brian Kim of stock manipulation charges related to the takeover of K-pop company SM Entertainment.

Kakao, based in South Korea, operates major internet services including messaging, banking, and ride-hailing.

Prosecutors had sought a 15-year prison sentence and a 500 million won (US$350,000) fine, alleging Kim and associates manipulated SM’s share price during a 2023 acquisition battle with Hybe.

The Southern District Court said on October 20 that there was not enough evidence to convict Kim.

Kim remains Kakao’s largest shareholder, with a net worth estimated at US$4.9 billion by Bloomberg.

Prosecutors had alleged that trades worth about 240 billion won were used to boost SM’s share price and block Hybe’s bid.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Acquittal doesn’t end risk

A South Korean district court dismissed charges against Kim for lack of evidence 1. Prosecutors could appeal, since they already appealed a related case against former Kakao Entertainment (Kakao’s content and media arm) CEO Kim Sungsoo on October 2, 2025 1.
Kakao Entertainment’s former investment head Lee Junho received a two-year sentence, suspended for three years 1. Prosecutors say he gained about 31.9 billion won via an inflated acquisition 1.
Fortune puts Kim’s net worth at $3.2 billion as of September 2024, down from over $14 billion at the peak 2. A conviction could force Kakao to cut its KakaoBank stake under financial-crime ownership caps 2.
Kakao may sell Kakao Entertainment for about 11 trillion won 3. It sent letters to Anchor Equity Partners (an Asia-focused private equity firm); Saudi Arabia’s Public Investment Fund (PIF), the country’s sovereign wealth fund; and Singapore’s GIC, the city-state’s sovereign wealth fund 3. The unit posts operating profit but has booked net losses for three straight years 3.
Kakao Mobility, South Korea’s largest taxi-hailing platform, is in talks with VIG Partners (a South Korea-based private equity firm) for a stake over 40 percent 4. Mubadala (Abu Dhabi’s sovereign wealth fund) and Goldman Sachs plan to invest $700 million; Tencent (a China-based internet company) is eyeing the second-largest position 4.
The group has shed over 30 subsidiaries 5. It plans to sell Kakao VX, its sports/golf tech unit, plus Kakao Healthcare, its digital health unit 5. Advisors, technology vendors, and corporate development teams can use this portfolio overhaul to map timelines plus targets 5.