Former Kakao Entertainment CEO Kim Sungsoo Faces 10-Year Prison Sentence Requested by Prosecutors

Published 14 Aug.2025 07:01(KST)

In the high-profile acquisition case involving drama production company Baram Pictures, prosecutors have argued that the purchase was "a clear case of breach of trust, not a legitimate acquisition." Former Kakao Entertainment (hereinafter Kakao Entertainment) CEO Kim Sungsoo and former Head of Investment Strategy Lee Junho countered, stating, "The prosecution has filed charges without understanding the content industry."

The 15th Criminal Division of the Seoul Southern District Court (Presiding Judge Yang Hwansung) held a final hearing on August 12 to deliberate charges against former CEO Kim Sungsoo and former Head Lee Junho for violating the Act on the Aggravated Punishment of Specific Economic Crimes. Prosecutors requested a 10-year prison sentence and a forfeiture of 1.25 billion won for Kim Sungsoo, and an 8-year prison sentence for Lee Junho. The court has scheduled the sentencing for 10:00 a.m. on September 30.

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The hearing, which lasted about four hours, proceeded in the following order: defendant examination, prosecution's sentencing recommendation, final arguments by the defense, and the defendants' closing statements, starting at 2:00 p.m. Lee Junho, who had injured his leg, appeared in court in a wheelchair and moved to the defendant's seat with crutches to stand trial.

Prosecutors raised concerns about the entire process of Kakao Entertainment's acquisition of Baram Pictures, led by Kim Sungsoo and Lee Junho between 2019 and 2020. The prosecution cited several issues: Kakao Entertainment provided Baram Pictures with approximately 13.7 billion won in planning and development expenses and 20 billion won in loans; Baram Pictures was acquired by Hong Kong-based private equity fund Anchor PE for 40 billion won and then sold back to Kakao Entertainment at the same price; and the acquisition price was set before Baram Pictures' value was properly assessed. Prosecutors argued that all these aspects were far from a normal acquisition process.

In particular, prosecutors highlighted that Lee Junho transferred more than 1.25 billion won to Kim Sungsoo using both debit and credit cards. They alleged that the two conspired to cause financial losses to Kakao Entertainment by acquiring Baram Pictures and also exchanged illicit financial benefits.

In contrast, Kim Sungsoo insisted, "I still believe acquiring Baram Pictures was a good decision," rejecting claims that the acquisition was overpriced. He explained that, given the reality of the drama industry where writers hold significant power, Baram Pictures' value was justified as it had two top writers. Kim Sungsoo also argued, "The planning and development expenses and loans were not simply given to Baram Pictures, but were funds to be settled after the completion of drama production," and added, "The reason Anchor PE was involved in the acquisition process was to avoid unnecessary misunderstandings with CJ ENM, which was wary of me." Kim Sungsoo had led CJ ENM for eight years starting in 2011.

Prosecutors asked Kim Sungsoo, "Didn't you fail to recover the settlement from Baram Pictures and convert it into equity in 2021?" Kim Sungsoo replied, "Since Baram Pictures became a subsidiary of Kakao Entertainment, the accounting team decided it was better to offset it internally," emphasizing, "There is no connection between the settlement and the acquisition of Baram Pictures."

Regarding his financial dealings with Lee Junho, Kim Sungsoo said, "We have been friends for 25 years and have invested in stocks together, so I was careless." However, he stressed that the financial transactions were unrelated to the acquisition of Baram Pictures.

Lee Junho took a similar stance to Kim Sungsoo. He stated, "After Kakao Entertainment's management and the Kakao Group agreed on the 40 billion won acquisition price for Baram Pictures, we asked an accountant to conduct a valuation," arguing that the price was not inflated.

Baram Pictures was established in February 2017 with a capital of 100 million won. Eighty percent of its shares were owned by actress Yoon Junghee, Lee Junho's wife, and the remaining 20 percent by writer Kim Eunhee, who has had multiple drama hits. Another star writer, Park Hyeryun, joined Baram Pictures in 2019.