By Kwanwoo Jun
A Seoul court cleared Kakao's billionaire founder, Kim Beom-su, of stock-manipulation charges, sending shares in the South Korean technology company rallying on Tuesday.
The Seoul Southern District Court acquitted the high-profile tech entrepreneur, who goes by Brian Kim in the West, of the criminal charges, ruling that prosecutors had failed to provide sufficient evidence to prove wrongdoing, according to court officials and state media.
Kakao shares climbed as much as 7.1% after the ruling. Investors cheered Kim's acquittal, viewing it as reducing legal risks and the uncertainty that had clouded the outlook for one of Korea's most influential internet platforms. The stock closed 6.0% higher, outperforming the benchmark Kospi's 0.2% rise.
"I would like to express my sincere gratitude to the court that spent a long time carefully reviewing the data and reached this conclusion," Kim told reporters outside the court in Seoul, according to television footage shown on state Yonhap TV and other South Korean networks.
"I hope this will serve as an opportunity for Kakao to escape the shadow of allegations of stock manipulation and price rigging that have been hanging over the company."
Prosecutors had earlier sought a 15-year prison term and a fine of 500 million won, equivalent to about $352,000, for Kim, accusing him of rigging the stock price of K-pop powerhouse SM Entertainment to frustrate rival bidders in a 2023 acquisition race.
Kim has denied any wrongdoing in Kakao's takeover of SM Entertainment.
The entrepreneur has built his tech empire around KakaoTalk, the popular messaging app used by more than 90% of South Korea's population. The chat app has played a pivotal role in expanding his businesses that range from shopping and gaming to ride-hailing and banking.
The latest court ruling eased fears about Kakao possibly losing control of its digital-bank affiliate, KakaoBank, as South Korean regulations ban any businesses or individuals convicted of financial crimes from owning more than 10% of a financial institution.
The legal overhang for Kakao hasn't fully lifted, as prosecutors are expected to bring the case to the appeals court, and then to the country's top court.
Kakao said Tuesday that the not-guilty verdict in the first trial confirmed that Kakao had been misunderstood as an unethical company.
"The Kakao Group has faced numerous challenges during the two-year and eight-month investigation and trial. The difficulty in responding quickly to rapid market changes is particularly painful," Kakao said in a statement. "We will strive to overcome this and fulfill our social responsibility."
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
10-21-25 0545ET
