SEOUL (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, 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 in February last year to hinder a competitor, Hybe, 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, 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)
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