[비즈한국] Will the prosecution appeal the first-instance acquittal of Kakao founder Brian Kim (Kim Beom-su)035720 in the SM Entertainment stock manipulation case? This is a point of keen interest in the legal community. The Criminal Procedure Act stipulates that if an appeal is not filed within seven days from the date of the judgment, the ruling becomes final. Accordingly, the prosecution must decide whether to appeal by October 28.
Typically, in cases initiated by investigators, it is standard practice to appeal even if the verdict is an acquittal. Because the investigation was launched based on the belief that a crime had been committed, "too lenient sentencing" is usually the default justification for an appeal even in cases where a guilty verdict is reached. However, the current atmosphere surrounding the prosecution is a variable. During the first-instance sentencing, the court pointedly noted, "The testimonies were obtained through investigations into separate matters, and without those statements, the defendants would not be standing in this courtroom." President Yoon Suk-yeol also criticized the prosecution's practice of mechanical appeals during a cabinet meeting on September 30 and ordered institutional reform. Because of this, speculation suggests that even if the prosecution does appeal against the Kakao executives, including founder Brian Kim, they may only select "certain charges" to pursue.
"Testimony is the sole evidence, with potential for falsehood"
The 15th Criminal Division of the Seoul Southern District Court (Presiding Judge Yang Hwan-seung) acquitted founder Brian Kim and former Kakao Chief Investment Officer Bae Jae-hyun, who were indicted on charges of violating the Capital Markets Act on the 21st, while criticizing the prosecution's "investigation into separate matters."
The court deemed the statement provided by Lee Jun-ho, former head of the Investment Strategy Division at Kakao Entertainment—which the prosecution presented as evidence of collusion between Kakao and One Asia Partners to manipulate stock prices—to be "close to a false statement." The court noted, "The testimony of the former division head is the core evidence of the public charges and, in effect, the only evidence submitted by the prosecution. The former division head was not only investigated for this case but also for separate matters, and faced extreme psychological pressure after having arrest warrants requested multiple times; he only reversed his previous stance to align with the prosecution's charges after the search and seizure related to the separate matter."
The court further judged, "He provided testimony matching the prosecution's charges and applied for leniency, as a result of which he was not indicted in this case. His motive and reason (to give false testimony) to escape investigation and trial are clear."
Minister of Justice also says, "Must heed the court's criticism"
Minister of Justice Park Sung-jae also posted a message on his social media the very next day, the 22nd, directed at the prosecution. Regarding the court's acquittal of Kakao founder Brian Kim and its criticism of the prosecution’s investigation into separate matters, Minister Park wrote, "It is a criticism that all members of investigative agencies must take to heart," adding that "an investigation that pressures persons of interest with unrelated matters to obtain statements can distort the truth and lead to unjust outcomes."
The fact that President Yoon Suk-yeol previously criticized the prosecution’s mechanical appeal practices is another reason why observers suggest that "the prosecution might not appeal" in this case. During the cabinet meeting on September 30, President Yoon pointed out, "The fundamental principle of the Criminal Procedure Act is that it is better to let 10 criminals go than to create one innocent victim. The prosecution operates in reverse. If they don't like someone, they indict them to cause them pain, but if it's someone on their side, they look the other way even when the crime is clear."
President Yoon further criticized, "When three judges in the first instance court hand down an acquittal, (the prosecution) appeals unconditionally." At the time, Minister Park Sung-jae responded, "The probability of a first-instance acquittal being overturned to a guilty verdict in an appellate court is (merely) 5%," adding that "there is a need to limit appeals."
Because of this, the possibility that the prosecution will not appeal the SM Entertainment stock manipulation case is being discussed. A lawyer with experience at the Seoul Southern District Prosecutors' Office said, "Usually, in cases involving corporate owners initiated by investigators, it is natural to appeal if there is a full acquittal, and it is common to appeal for reasons of sentencing even if a full guilty verdict is reached," adding, "(This time), because not only the Minister of Justice but even the President has spoken out, it would not be strange if an exceptional decision (to abandon the appeal) were made at the Supreme Prosecutors' Office level."
This case will serve as a 'guideline'
Currently, the prosecution is reportedly reviewing whether to appeal based on the written judgment, and there is speculation that the scope of the appeal might be narrowed. When investigating founder Brian Kim, the prosecution had expanded the investigation, reasoning that "since charges were confirmed—evidenced by the issuance of an arrest warrant for former Kakao Investment CIO Bae Jae-hyun—it is highly likely that this was reported to founder Brian Kim."
A legal expert who served as a chief of the Special Investigation Department at the Seoul Central District Prosecutors' Office predicted, "Wouldn't they be reviewing various options, such as not pushing for an appeal against the highest level (Brian Kim) in an unreasonable manner, and instead appealing by indicting the working-level staff?" He added, "Whether the prosecution has truly changed and what stance the prosecution will take regarding corporate investigations over the remaining year—this case will serve as a guideline."