The prosecution investigating Kakao's alleged overpayment in acquiring a drama production company summoned Kim Seong-su, CEO of Kakao Entertainment, and Lee Junho, head of the investment strategy division, as suspects on the 24th for questioning.


According to legal circles, the Financial Investigation Division 1 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Kwon Chan-hyeok) summoned CEO Kim and Division Head Lee this morning to investigate the acquisition process of the drama production company 'Baram Pictures.'


Kakao Headquarters <br>Photo by Yonhap News

Kakao Headquarters
Photo by Yonhap News

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Kakao acquired Baram Pictures in 2020 for 20 billion KRW, but at the time, Baram Pictures had been operating at a loss for several years and had a capital of only 100 million KRW. CEO Kim and Division Head Lee are suspected of purchasing Baram Pictures at an excessively high price compared to the market value, causing losses to the company.


Baram Pictures was a company in which Lee's wife, actress Yoon Jeong-hee, had invested and was a major shareholder. The prosecution suspects that Division Head Lee conspired with CEO Kim to divert market gains to Baram Pictures.


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The prosecution launched a direct investigation after detecting signs of breach of trust while examining Kakao's alleged market manipulation of SM Entertainment, which was referred by the Financial Supervisory Service.


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