Prosecution questions Kakao founder over alleged stock manipulation

By Kim Joo-heon Posted : July 9, 2024, 10:21 Updated : July 11, 2024, 15:30
This file photo shows Kim Beom-su, the founder of tech giant Kakao Corp. AJU PRESS Yoo Dae-gil
SEOUL, July 9 (AJU PRESS) - The prosecution questioned Kim Beom-su, the founder of Kakao Corp., on Tuesday as part of their investigation into his alleged stock manipulation linked to Kakao's takeover of SM Entertainment last year.

Kim appeared before the Seoul Southern District Prosecutors Office in the morning to face a probe on charges of violating the Financial Investment Services and Capital Markets Act.

Kim is accused of rigging the stock price of the K-pop agency in February 2023 to obstruct the public tender offer by HYBE, an entertainment powerhouse behind BTS. Kim is suspected of having inflated the price higher than the offer price of 120,000 won ($86.70).

HYBE purchased a 14.8 percent stake in SM Entertainment from its founder, Lee Su-man. Although HYBE initially proposed buying SM shares from minor shareholders at 120,000 won each, it pulled back from its takeover attempt after SM’s stock price surged.

In March 2023, Kakao, which runs Korea’s largest mobile messaging app, and Kakao Entertainment took control of SM Entertainment by acquiring a 39.87 percent stake.

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