Kakao Founder Kim Beom-su Undergoes 8-Hour Prosecutor Investigation One Day After Detention

Kakao founder and Management Innovation Committee Chairman Beom-su Kim, considered the pinnacle of the 'SM market manipulation' suspicion, is attending the pre-arrest suspect interrogation (warrant hearing) held on the 22nd at the Southern District Court in Yangcheon-gu, Seoul. Photo by Hyun-min Kim kimhyun81@

Kim Beom-su, the chairman of the management innovation committee and founder of Kakao, who was detained on suspicion of market manipulation during the acquisition process of SM Entertainment, was summoned by the prosecution for the first time since his detention on the 24th and was investigated for eight hours.

According to the legal community, the Financial Investigation Division 2 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Jang Dae-gyu) summoned Chairman Kim from the Seoul Southern Detention Center at 10 a.m. that day for questioning. This was 33 hours after his detention at 1 a.m. the previous day.

Chairman Kim returned to the detention center around 6 p.m. after completing the investigation and reviewing the records. The prosecution had also requested his appearance the previous afternoon, but the investigation was canceled as Chairman Kim submitted a letter of absence citing health reasons.

The prosecution is reportedly focusing on whether Chairman Kim directly ordered or approved the market manipulation. He was detained on suspicion of manipulating the stock price of SM Entertainment to set and fix it higher than the public tender offer price of 120,000 KRW by HYBE, a competitor, in order to obstruct HYBE's public tender offer during the acquisition process in February last year.

The prosecution believes that as the group's top decision-maker, Chairman Kim was informed of and approved the market manipulation plan in advance. In particular, they view that the decision to acquire SM Entertainment under Chairman Kim's approval was made to cover Kakao Entertainment's net losses, which increased from 29.8 billion KRW in 2021 to 629.8 billion KRW in 2022, and 1.2235 trillion KRW last year.