The founder of South Korean telecom giant Kakao Corp. has been indicted on suspicion of stock price manipulation in connection with Kakao’s bidding war last year against K-pop giant HYBE for control of music agency SM Entertainment.
The Seoul Southern District Prosecutor’s Office filed an indictment Kim Beomsoo According to local news reports, the fine was imposed on Thursday (August 8) for violating the Financial Investment Services and Capital Markets Act. The indictments were filed about two weeks after Kim Jong Un was arrested following a lengthy investigation.
Appointed Kakao CEO Hong Enze and Kim Sung-sooformer CEO of subsidiary Kakao Entertainmentwas charged on the same day as Kim Beom-su’s arrest, JoongAng Ilbo the report said.
Prosecutors accused Kim of participating in a campaign to increase SM Entertainment’s stock price in order to squeeze HYBE out of the bidding war. They said Kim and other top brass were excited 240 billion won ($174 million) Enter SM Entertainment Stock Chapter 553 Transactions that occurred on February 16-17 and February 27-28, 2023.
Prosecutors initially linked Kim to only the second half of those transactions in late February, which they claimed occurred in Asian context partnersis an asset management company associated with Kakao.
However, further investigation led prosecutors to accuse King of involvement in all alleged stock manipulation incidents, korea herald the report said.
According to earlier news reports, the CEO of AsiaVenture Group, who was identified only by his surname lucky – is also on trial for alleged stock price manipulation.
Kakao Chief Investment Officer, Bae Jae HyunIn October last year, he was arrested and charged for breaching the Capital Markets Act.
In addition, prosecutors said Kim and Kakao violated securities laws by failing to disclose their acquisition of SM Entertainment. Korean law requires any entity to have more than 5% Holds shares in a listed company and discloses share purchases to regulators, Kakao has 8.16% SM at the time of transaction.
Kakao reportedly said in a statement released on Thursday that it would “work hard to prove the facts during the court trial” and “minimize the management vacancy caused by Kim’s arrest.” JoongAng Ilbo.
Prosecutors say a series of transactions in February 2023 caused SM stock prices to be inflated 120,000 won ($87) per share, the price at which HYBE buys the stock 14.8% The shares held by SM founders, Lee Soo Manand the price at which HYBE proposed to acquire the shares of other SM shareholders.
HYBE finally withdrew from the competition for SM, while Kakao ended up with 39.9% equity in the company.
But the story didn’t end there, HYBE filed legal proceedings against Kakao, accusing it of stock price manipulation, triggering an investigation that included a series of raids on Kakao’s headquarters as well as SM Entertainment’s offices.
Despite the swirl of accusations surrounding Kakao’s acquisition of SM, South Korea’s trade regulator approved the deal earlier this year, but attached certain conditions to ensure Kakao did not abuse its strong position in the music market.
Coco owns melonSouth Korea’s largest music streaming service. Under the conditional approval, Melon must release music from labels and distributors competing with SM Entertainment.
Kakao also owns KakaoTalkSouth Korea’s dominant instant messaging service. In an expanding criminal investigation, the company uncovered more than 40% The value of its shares was wiped out. The stock was trading at approximately 38,450 won Thursday, dropped from around 67,000 won In February last year, before the bidding war for SM Entertainment.global music business
