Kim Beom-su "Never Approved Illegal Activities While Running Business"... Appeals for Bail in Court

Kim Beom-su, chairman of Kakao's Management Innovation Committee, who was arrested and indicted on charges of 'SM stock price manipulation,' appealed for bail at the court on the 16th, stating, "I have never approved or concluded anything illegal or unlawful while conducting business."

Kim Beom-su, Chairman of Kakao Management Innovation Committee / Photo by Kim Hyun-min kimhyun81@

During the trial and bail hearing held in the afternoon at the Seoul Southern District Court Criminal Division 15 (Chief Judge Yang Hwan-seung), Kim, who was given the opportunity to speak toward the end, said, "The prosecution is talking about many things I did not do, and that part is very frustrating." He continued, "Next week marks three months since my detention, and I never expected to be detained," and repeatedly requested, "Please consider the parts that are unfair."

Kim was detained on July 23 on charges of violating the Capital Markets Act. The initial detention period in the first trial is two months from August 8, when the indictment was filed, and it has been extended once until December 7 by the decision of the presiding court. The detention period in the first trial can be extended up to two times, so there is a possibility it could extend into February next year depending on the court's judgment.

Kim's lawyer stated, "The share purchase was made one and a half years ago, and the facts claimed by the prosecution clearly differ from the defendant's (Kim's) memory, so it is important to review the evidence directly and recall the facts," adding, "For the minimum guarantee of defense rights, a trial in a non-detained state is urgently needed." He also mentioned that Bae Jae-hyun, former head of Kakao's investment division, who is being tried for the same case, was released on bail and is undergoing trial in a non-detained state.

On the other hand, the prosecution argued, "There has been no change in the reasons for issuing the arrest warrant, such as concerns about evidence destruction and flight risk," and stated, "Only two trial dates have been held, and substantive hearings have not yet taken place," insisting that detention should be maintained. The prosecution expressed concern, saying, "The defendant is the head of a large conglomerate, Kakao, exercising strong decision-making power," and "Most of the witnesses to be questioned in the future are Kakao employees, so there is a risk of tangible and intangible influence."

The court plans to decide on bail soon based on the hearing content.

In the earlier hearing, Kim's side completely denied the charges against him, as in the previous trial. Kim's lawyer argued, "At the time of the share competition in February 2023, HYBE declared a public tender offer, and Kakao's method was an on-market purchase, which is lawful," adding, "On-market purchases inevitably affect stock prices, but that alone cannot be said to indicate an intent of (price manipulation)." The lawyer cited similar cases in the past mergers and acquisitions (M&A) market, stating, "The market recognizes on-market purchases as a legal means to counter a competitor's public tender offer," and emphasized, "There has been no precedent of criminal punishment for this as price manipulation." Regarding the suspicion of collusion with One Asia Partners, he pointed out, "There is no direct evidence that Kim instructed this," and "The prosecution also did not include this in the criminal facts due to lack of evidence but is making unreasonable claims in court."

During the hearing, Kim himself stated, "I opposed the SM acquisition from the beginning," and added, "My position was to negotiate rather than fight with HYBE, and I agreed to the simple purchase under the perception that there was no legal problem." He further said, "I did not know about One Asia Partners' (SM stock) purchase," and "There was no collusion."

The prosecution countered, "Looking into the SM acquisition process, it is clear that Kakao committed price manipulation to block HYBE's public tender offer," and argued, "The accumulation of SM stocks through the One Asia Partners fund and the purchase within 5% without disclosure obligation on the last day of the public tender offer (February 28, 2023) were all actions under Kim Beom-su's instructions." They emphasized, "We can confirm Kim Beom-su's instructions with objective evidence," and pledged to prove this later through physical evidence.