Tech giant Kakao on Tuesday welcomed a Seoul court's ruling clearing founder Kim Beom-su of stock manipulation charges related to the company's takeover of K-pop agency SM Entertainment, vowing efforts to regain momentum in the fast-growing AI industry.
"We express our gratitude for the court's judicious ruling," Kakao said in a released statement. "The company has long been misunderstood as an unethical company that manipulated stock prices. The court's decision confirms that such perceptions were unfounded."
Kakao stressed that it has overcome past controversies and is ready to make a turnaround.
"Kakao has faced numerous challenges during the investigation and trial that lasted two years and eight months. It is deeply regrettable that we struggled to respond swiftly to rapid market changes," it said. "We will strive hard to make up for lost time and fulfill our social mission."
Kim, who now heads Kakao's Future Initiative Center, also thanked the court for helping the company rebuild its reputation.
In response, the prosecution said it will review whether to appeal the court's decision after thoroughly analyzing it.
The Seoul Southern District Prosecutors' Office said parts of the lower court's ruling were "difficult to accept," particularly the assessment of alleged prosecutorial pressure on Lee Jun-ho, the former head of investment strategy at Kakao Entertainment.
Earlier in the day, the Seoul Southern District Court cleared Kim of violating the Capital Market Act by inflating SM Entertainment's share prices in order to block a takeover bid by HYBE.
Kakao competed with HYBE, the parent company of K-pop superband BTS's management agency BigHit Music, in February 2023 to acquire K-pop powerhouse SM, which manages a number of big-name artists, including EXO, Super Junior and aespa.
HYBE withdrew its bid after SM shares surged, leaving Kakao as the new owner.
During Kim's investigation, Kakao undertook efforts to revamp its governance and operations, streamline its business portfolio and regain public confidence.
The number of affiliates has fallen about 30 percent to 99 over the past 18 months.
The company has also expanded its focus on AI, partnering with OpenAI to introduce the chatbot ChatGPT to its messaging app KakaoTalk.
Yonhap