A South Korean court has acquitted Kakao Corp's billionaire founder, Kim Beom-su, of stock manipulation charges. This ruling, delivered on Tuesday, led to an immediate 5% increase in shares of the country's dominant chat app operator. Kim had been arrested in July of the previous year on allegations of orchestrating the manipulation of SM Entertainment's stock price in 2023, with the aim of obstructing a competitor, Hybe, from acquiring the company. He was subsequently released on bail in October 2024, following prosecutors' earlier request in August for a 15-year jail term and a 500 million won fine.

Upon hearing the verdict, Kim Beom-su expressed gratitude to the court, stating, "I hope this serves as an opportunity for Kakao to move, even slightly, out of the shadow of stock price and market manipulation." Kim is a prominent figure in South Korea's digital landscape, renowned for establishing Kakao's vast group of affiliates, which collectively hold assets worth 94 trillion Korean won. His journey began with the launch of the popular messaging application, KakaoTalk, in 2010.

KakaoTalk remains South Korea's largest messaging app, utilized by nearly 50 million Koreans. The company's business portfolio is diverse, spanning various sectors including gaming, shopping, banking, and taxi-hailing services. Analyst Kim Dong-woo from Kyobo Securities noted that while the case is likely to proceed to the Supreme Court, today’s ruling significantly eases legal risks for Kakao, given Kim Beom-su's full exoneration.

The outcome of this high-profile case held particular significance for Kakao's control over its online bank arm, KakaoBank. South Korean financial regulations stipulate that individuals convicted of financial crimes are restricted from owning more than a 10% stake in a bank. As the largest shareholder of Kakao Corp, Kim Beom-su, along with affiliated entities, controls a 24% stake. The court's decision therefore averted a potential crisis for KakaoBank's ownership structure. Kakao Corp did not immediately provide a comment on the ruling.