Seoul: Tech giant Kakao Corp. on Tuesday celebrated a Seoul court's ruling that cleared its founder, Kim Beom-su, of stock manipulation charges connected to the company's acquisition of K-pop agency SM Entertainment Co. The company expressed its commitment to regaining momentum in the burgeoning artificial intelligence (AI) industry.
According to Yonhap News Agency, Kakao released a statement expressing gratitude for the court's decision. "The company has long been misunderstood as an unethical entity that manipulated stock prices. The court's decision confirms that such perceptions were unfounded," the statement read. Kakao emphasized its readiness to overcome past controversies and pursue a new path forward.
Kakao acknowledged the challenges it faced during the two-year and eight-month investigation and trial. "It is deeply regrettable that we struggled to respond swiftly to rapid market changes," the company stated. "We will strive hard to make up for lost time and fulfill our social mission." Kim, who now leads Kakao's Future Initiative Center, also expressed thanks to the court for aiding the company in rebuilding its reputation.
The prosecution, however, is considering whether to appeal the court's decision after a thorough analysis. The Seoul Southern District Prosecutors' Office noted that parts of the ruling were "difficult to accept," particularly regarding alleged prosecutorial pressure on Lee Jun-ho, the former head of investment strategy at Kakao Entertainment.
Earlier, the Seoul Southern District Court acquitted Kim of violating the Capital Market Act by allegedly inflating SM Entertainment's share prices to block a takeover bid by Hybe Co. Kakao had competed with Hybe, the parent company of K-pop superband BTS' management agency BigHit Music, in February 2023 to acquire SM Entertainment, which manages artists like EXO, Super Junior, and aespa. Hybe eventually withdrew its bid, leaving Kakao as the new owner.
Throughout Kim's investigation, Kakao made significant efforts to revamp its governance and operations, streamline its business portfolio, and regain public confidence. The number of affiliates has decreased by about 30 percent to 99 over the past 18 months. Additionally, Kakao has expanded its focus on AI by partnering with OpenAI to integrate the chatbot ChatGPT into its messaging app, KakaoTalk.