This image shows Kim Beom-su, founder of Kakao Corp. (Image courtesy of Yonhap)
SEOUL, Jul. 17 (Korea Bizwire) — Prosecutors have sought a warrant to arrest Kim Beom-su, the founder of tech giant Kakao Corp., over alleged stock price manipulation connected to the firm’s takeover of K-pop powerhouse SM Entertainment last year, officials said Wednesday.
The Seoul Southern District Prosecutors Office filed for the warrant, the officials said, a week after questioning Kim regarding his alleged involvement in manipulating SM shares.
The investigation centers on suspicions that the mobile platform company and its executives manipulated SM stock prices in a bidding war it won in February last year against Hybe, the parent company of K-pop superband BTS’ management agency BigHit, over the takeover of SM.
SM shares were allegedly driven above 120,000 won (US$86.9) per share through alleged rigging, the fixed price at which Hybe was buying shares from investors.
Hybe acquired a 14.8 percent stake in SM from its founder Lee Su-man. Hybe had offered to buy up SM shares from small shareholders at 120,000 won per share, but it later withdrew its takeover bid when SM shares significantly jumped.
In March last year, Kakao and Kakao Entertainment became the controlling shareholder in SM Entertainment after acquiring a 39.87 percent stake in the agency.
Prosecutors suspect Kakao of purchasing 240 billion won (US$173.8 million) worth of SM shares at prices above Hybe’s tender offer price on 553 occasions in mid-to-late February last year to undermine a tender offer from Hybe during the takeover battle.
During questioning last week, Kim claimed that he had been informed about plans to buy SM shares, but not about the specific purchase procedures.
(Yonhap)
