'Overpriced Acquisition of Production Company': Former Kakao Entertainment CEO Kim Sungsoo Acquitted in First Trial

Kim Sungsoo, the former CEO of Kakao Entertainment, who was accused of causing over 30 billion won in losses to the company by acquiring the drama production company Baram Pictures at an inflated price, was acquitted in the first trial.

On September 30, the 15th Criminal Division of the Seoul Southern District Court (Presiding Judge Yang Hwansung) acquitted former CEO Kim of charges including breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes. Lee Junho, the former head of investment strategy who was indicted alongside Kim, was sentenced to two years in prison with a three-year suspended sentence for embezzlement.

The court stated regarding Kim's breach of trust charges, "It is acknowledged that there were financial transactions between the defendants, and there are suspicions that these transactions may be related to Baram Pictures. However, suspicion alone and the evidence submitted by the prosecution are insufficient to recognize that Kim requested or actually executed the overpriced acquisition," the court ruled.

Regarding Lee's embezzlement charges, the court explained, "It has been confirmed that the funds were used for personal purposes unrelated to the company's business activities, such as purchasing an apartment. Furthermore, since repayment occurred more than two years and six months after the loan date, he is found guilty." The court added, "He used company funds for personal purposes for a considerable period. Given his position, the method of the crime, and the scale of the damage, the severity of the offense is not minor."

Lee is accused of causing financial losses to the company by arranging for Kakao Entertainment to acquire Baram Pictures, a drama production company he actually owned, at an inflated price, thereby gaining approximately 31.9 billion won in profit. Kim was accused of receiving 1.25646 billion won from Lee as a reward for collusion.

Lee also faced charges of misappropriating 1.05 billion won for personal use, such as real estate purchases and loan repayments, from over 6 billion won that Baram Pictures had received from another production company as planning and development fees, without following proper loan procedures.

At the sentencing hearing on August 12, the prosecution had sought a 10-year prison sentence and a forfeiture of 1.25 billion won for Kim, and an 8-year prison sentence for Lee.

This content was produced with the assistance of AI translation services.