[Reporter’s Notebook] Does the Prosecution Have the Will to Prove ‘SM Price Manipulation’ Charges?

The trial for the ‘SM Price Manipulation’ case held on the 15th at the Seoul Southern District Court came to a standstill. Kim Ki-hong, former Chief Financial Officer (CFO) of Kakao, who was expected to appear as a witness that day, did not show up in court. This was the first trial held without detention for Kim Beom-su, Chairman of Kakao’s Management Innovation Committee, who was released on bail, and the trial attracted so much public interest that the gallery was almost full. However, after calling only the defendant and defense counsel to appear, the trial ended abruptly after about an hour.

Witness no-shows happen occasionally. But this time, the circumstances are suspicious. When the summons could not be delivered due to a closed door and no one being present, the prosecution reportedly notified the witness’s counsel by phone. However, former CFO Kim submitted a brief letter of absence through his lawyer citing ‘personal reasons’ and refused to appear. Ultimately, the court issued a warrant for Kim’s detention on the day of the trial.

Fundamentally, it is the prosecution’s responsibility to present witnesses to prove the charges. Former CFO Kim was the key figure the prosecution said should be questioned first. It is regrettable that the trial date was wasted due to the witness’s unilateral absence. The defense team requested to rearrange the order of witnesses to avoid further delays until the next trial date, but the prosecution refused. This led to a tense exchange. Eventually, the presiding judge raised his voice and sternly urged, “Please ensure there are no issues delivering summonses on the next trial date.”

This case has been ongoing for a year in the first trial alone. The presiding judge was changed once during this period. Additional defendants were added. Chairman Kim was indicted in August and the cases were consolidated this month. The trial is essentially starting anew. Reporting on the trial process over the past year reveals several unusual aspects. The investigation has been continuously prolonged, and the concrete evidence the prosecution confidently claimed has yet to be confirmed.

The case began when HYBE submitted a complaint to the Financial Supervisory Service (FSS) on February 27 last year. It took only about ten days for the FSS to issue an investigation report. Compared to other complaints, this was an exceptionally fast process. The FSS issued a major press release, and Chairman Kim endured the humiliation of standing at the ‘financial authorities’ photo line.’

However, once the trial started, the prosecution wasted time on power plays such as witness order and volume of evidence rather than presenting concrete proof. The business community openly suspects that the investigation targeting Kakao and Chairman Kim had other motives. To dispel unnecessary misunderstandings, the prosecution must focus more on proving the charges. Many eyes are watching the trial.