South Korea court to decide on arrest warrant for Kakao founder

SM Entertainment Co

22/07/2024 08:01

SEOUL, July 22 (Reuters) - A South Korean court began
reviewing on Monday a prosecution request for a warrant to
arrest Brian Kim, the billionaire founder of tech giant Kakao
Corp  035720.KS , on accusations of stock manipulation during a
2023 acquisition. 
    It is the latest legal twist for Kakao after the company and
an executive went on trial last year for alleged wrongdoing
during the same acquisition. 
    Prosecutors say Kim was involved in manipulation of the
stock price of SM Entertainment  041510.KQ  in February last
year to hinder a competitor, Hybe  352820.KS , from acquiring
the K-Pop agency. 
    Not yet formally charged, Kim has denied the accusations,
saying he has never ordered or tolerated any illegal activity,
the company said in a statement. 
    The high-profile tech entrepreneur is the founder and
largest shareholder of Kakao Corp, with a stake of 24%
controlled by him or affiliated entities. 
    The court, which is expected to announce its decision late
on Monday or early Tuesday, will only rule whether a warrant is
appropriate, and not on the prosecution's allegations. 
    Analysts said the outcome of any case against Kim could also
jeopardise Kakao group's control of online bank arm KakaoBank
Corp  323410.KS , since the rules restrict those convicted of
financial crime from owning a stake of more than 10% in a bank.
    Continued regulatory and social scrutiny is also seen making
it tougher for bold decisions by the operator of South Korea's
largest chat app on investments in artificial intelligence (AI)
and affiliates' fundraising plans, such as IPOs, they said. 
    The company plans to introduce new AI services this year.
    Kim heads a "corporate alignment" council that co-ordinates
the interests of the Kakao group's 128 affiliates and decides
what businesses to concentrate on. 
 ($1=1,389.2700 won)

 (Reporting by Joyce Lee;
Editing by Ed Davies and Clarence Fernandez)
 ((joyce.lee@tr.com;))