Trial of Kim Beom-su without 'Smoking Gun'... Prosecution's Offensive with 900 Pieces of Evidence

In the trial of Kim Beom-su, Chairman of Kakao's Management Innovation Committee, who is accused of manipulating SM's stock price, the prosecution launched a volume offensive with evidence including about 900 recordings and KakaoTalk messenger conversations. There was a dispute between the prosecution and the defense over the amount of evidence and the interpretation of Chairman Kim's statements.

Chairman Kim Beom-su of Kakao's Management Innovation Committee, indicted on charges of 'SM price manipulation' / Photo by Hyunmin Kim kimhyun81@

According to the legal community on the 31st, the Seoul Southern District Court Criminal Division 15 (Presiding Judge Yang Hwan-seung) held the third trial session for Chairman Kim and others, who were indicted on charges of violating the Capital Markets Act, the previous day. Before the main hearing, an investigation into the evidence secured by the Seoul Southern District Prosecutors' Office over more than a year of investigation was conducted. Due to the vast amount, it took about 1 hour and 40 minutes for the prosecution to explain. With the number of pieces of evidence reaching 900, it took a total of 4 hours for the defense to express their opinions on each piece during the evidence investigation. The presiding court even mentioned that "the amount of evidence is excessively large," but the prosecution said it was "efficiently filtered."

At the trial that day, the prosecution emphasized that Kakao manipulated SM's stock price to block HYBE's public tender offer, and that there was an instruction from Chairman Kim during this process. It was also found that during the tender offer period, Kakao sought legal advice from a lawyer out of concern that their on-market accumulation activities might constitute stock price manipulation.

In particular, on February 14 of last year, when the share competition was in full swing, Chairman Kim met with Bang Si-hyuk, Chairman of HYBE, and the next day told employees to "now peacefully bring (SM) over." The prosecution pointed out that this was an instruction for Kakao not to show a confrontational stance with HYBE and to remain discreet externally. On the other hand, the defense argued that the term "peacefully" merely meant to negotiate with HYBE and was a forced interpretation by the prosecution.

The prosecution submitted a statement expressing the necessity of summoning Chairman Bang as a witness, but the decision on whether to accept the witness has not been made. The next trial is scheduled for the 15th of next month and will be combined with the case involving former Kakao Chief Investment Officer Bae Jae-hyun and others. A decision on the bail application filed by Chairman Kim is also expected around mid to late next month.