Prosecutors at the closing hearing asked the court to sentence Kim to 15 years in prison on stock manipulation charges, the same term they sought before a lower court acquitted him in October 2025.
They argued the acquittal overlooked clear evidence and misread the law.
Kakao's board approved a plan on Aug. 21 to split the company in two. Kakao AI will run KakaoTalk along with the AI, advertising and commerce businesses. Kakao X will hold the group's affiliates and manage its investments.
The split is set to take effect Jan. 1, 2027, if shareholders approve it on Dec. 17.
A bid by the union and some minority shareholders to block Kakao's merger with Kakao Investment fell short.
Dissenting shareholders held about 2 percent of issued shares when the objection period closed on Sept. 21. At least 20 percent was needed to force a shareholder vote.
The board is set to vote on the merger on Nov. 6. Kakao Investment's assets will pass to Kakao X after the split.
The union, which has also protested the planned exit of executives at Kakao Entertainment's North American webtoon platform Tapas, says the split lacks firm guarantees on job succession and working conditions.
"We can no longer leave our jobs, our working conditions and Kakao's future to management's judgment alone," Seo Seung-wook, head of the union's Kakao chapter, said at an Aug. 26 rally.
Meanwhile, Kim was indicted in August 2024 on charges of conspiring to hold SM Entertainment's share price above rival HYBE's 120,000 won ($88.5) tender offer in February 2023, as Kakao battled for control of the K-pop agency.
The Seoul Southern District Court cleared him, finding the prosecution's key witness testimony unreliable.
AJP Takeaways
- Kakao's labor union picketed outside the Seoul High Court on Sept. 23, 2026, as prosecutors sought a 15-year prison term for founder Kim Beom-su in his appeal over alleged manipulation of SM Entertainment shares.
- Shareholders opposing Kakao X's absorption of Kakao Investment held about 2 percent of Kakao's issued shares, short of the 20 percent threshold needed to force a shareholder vote, leaving the merger to a board vote scheduled for Nov. 6, 2026.
- Kakao plans to split into Kakao AI and Kakao X on Jan. 1, 2027, subject to shareholder approval on Dec. 17, 2026, while the union demands job guarantees and a fuller explanation of the restructuring.
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