Kakao Corporation, South Korea’s leading tech company known for its popular messaging app KakaoTalk, is facing a severe crisis. Its top executives, including founder Kim Beom-su and Chief Investment Officer Bae Jae-hyun, are embroiled in legal battles over allegations of stock manipulation during the high-profile takeover of SM Entertainment — a South Korean multinational entertainment agency.

This legal issue could have significant consequences for Kakao, as a conviction would mean losing management control of KakaoBank, its internet-only banking venture, as per Korean law. This situation is particularly critical as it threatens to derail the company’s global expansion plans, especially with SM Entertainment, a key player in the K-pop industry.