Kakao chairman summoned over alleged stock manipulation in SM Entertainment dispute
In the midst of a management dispute at SM Entertainment, prosecutors investigating allegations of market manipulation by Kakao have summoned Kim Beom Su, Chairman of Kakao’s Corporate Revitalization Committee, for his alleged involvement in stock price manipulation.
On July 9 KST, the Financial Investigation Division 2 of the Seoul Southern District Prosecutors’ Office (led by Prosecutor Jang Dae Gyu) announced that Kim Beom Su, the founder of Kakao, had been summoned for questioning on charges of violating the Capital Markets Act.
Previously, Kakao and HYBE engaged in a public tender offer competition last year to secure shares for acquiring control of SM Entertainment. Kim Beom Su is accused of engaging in market manipulation by setting and maintaining SM Entertainment’s stock price above HYBE’s tender offer price of 120,000 won to obstruct HYBE’s bid.
HYBE filed a complaint with the Financial Supervisory Service, alleging abnormal purchase activities through a specific IBK Investment & Securities account during the tender offer period. While HYBE eventually abandoned its bid for SM’s management control, making Kakao the largest shareholder, the allegations of market manipulation and violations of the Capital Markets Act have persisted, and the investigation continues.
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