This image shows Kim Beom-su, founder of Kakao Corp. (Image courtesy of Yonhap)
SEOUL, Jul. 9 (Korea Bizwire) — Kim Beom-su, the founder of tech giant Kakao Corp., appeared before prosecutors on Tuesday for questioning over alleged stock price manipulation connected to the firm’s takeover of K-pop powerhouse SM Entertainment last year.
Kim presented himself for questioning at the Seoul Southern District Prosecutors Office 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$86.71) 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$73 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 rival bidder Hybe during the takeover battle.
Prosecutors earlier indicted Kakao’s chief investment officer Bae Jae-hyun and the company itself on stock manipulation charges, along with the chief of a private equity fund involved in the case.
The indictment followed the Financial Supervisory Service’s referral last year of Kim, Bae and several other Kakao executives to the prosecution for further investigation in the case.
(Yonhap)
