A South Korean court is currently evaluating a prosecution request to arrest Brian Kim, the founder of Kakao Corp, for alleged stock manipulation during a 2023 acquisition.Â
The prosecution alleged that Kim manipulated the stock price of SM Entertainment to obstruct competitor Hybe from acquiring the K-Pop agency.
Brian Kim has firmly denied these accusations, asserting that he has never ordered or condoned any illegal activities.
The court’s decision, expected late Monday or early Tuesday, will determine the appropriateness of the warrant, not the veracity of the prosecution’s allegations.
A potential conviction could have significant repercussions for Kakao Corp, particularly concerning its control over KakaoBank Corp.
South Korean regulations restrict individuals convicted of crimes from holding substantial stakes in banks, which could undermine Kakao’s banking interests.
Additionally, the ongoing scrutiny and legal challenges could influence Kakao’s strategic decisions, especially in its AI investments and fundraising plans for its various affiliates.
Kim, who leads a “corporate alignment” council that oversees the coordination of interests across Kakao’s 128 affiliates, plays a crucial role in determining the company’s business focus areas.
Despite the legal turmoil, Kakao Corp said it remains committed to its business plans, including the introduction of new AI services within the year.
