Kakao avoided the worst, arrest warrant for CEO Kim Seong-soo dismissed for 'breach of trust'
Kakao avoided the worst, arrest warrant for CEO Kim Seong-soo dismissed for 'breach of trust'
Kakao Entertainment avoided the worst. CEO Kim Seong-soo and head of the investment strategy division Lee Jun-ho avoided arrest.

On the afternoon of the 1st, Chief Judge Yoo Hwan-woo of the Seoul Southern District Court, in charge of warrants, issued arrest warrants for CEO Kim and Head of Department Lee, who are suspected of breach of trust under the Aggravated Punishment Act for Specific Economic Crimes and violation of the Act on Concealment of Crime Proceeds, after interrogating suspects (substantial examination of warrants) before arresting them. Each was dismissed.

Chief Judge Yoo Hwan-woo believed that it was necessary for the two people to exercise their right to defense, that a considerable amount of evidence related to the charges had been secured, and that there was little concern about destruction of evidence and flight. Chief Judge Yoo said, “There is room for dispute over whether a crime has been established and the amount of damages, so there is a need to fully exercise the right to defense without detention.”

He continued, “Objective evidence, including transaction information of related financial institutions, has already been secured through search and seizure,” and “Considering the residence is constant, the progress of the investigation, attitude toward investigation and interrogation, social ties, etc., there are concerns about destruction of evidence or flight.” “It is difficult to believe that there is,” he added.

The prosecution detected allegations of breach of trust by CEO Kim Seong-soo and this division head during the acquisition of KakaoM's production company, Baram Pictures, which took place in July 2020. Kakao M purchased the drama production company Baram Pictures, which had capital of 100 million won, for 20 billion won and even proceeded with a capital increase, which is believed to have caused significant damage to the company.

Prosecutors suspect that Lee, who was the head of Kakao Entertainment's sales business division at the time of the acquisition, conspired with CEO Kim for the purpose of driving market profits to Baram Pictures, in which his wife, actress Yoon Jeong-hee, invested.

Meanwhile, Baram Pictures was acquired by Kakao in 2020, although its financial condition was poor, with operating losses increasing to 100 million won in 2018, 700 million won in 2019, and 2.2 billion won in 2020. Afterwards, he produced tvN's 'Jirisan' in 2021, Netflix's 'Kingdom: Asinjeon', and tvN's 'Survival as a Celebrity Manager' in 2022. Recent works include tvN's 'Diva of the Desert Island', the Netflix series 'The Sound of the Thief's Sword', and the Disney+ original series 'The Worst Evil'.

Choi Ji-ye, Ten Asia Reporter wisdomart@tenasia.co.kr translated by google