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Bumsoo Kim, founder of Kakao. (Photo = Yonhap news) |
[Alpha Biz= Reporter Kim Jisun] Kakao's Governance Renewal Committee Chairman, Kim Beom-su, has been indicted and is currently detained on charges of manipulating stock prices during the acquisition of SM Entertainment. Prosecutors believe that the market manipulation was systematically and covertly orchestrated under Kim's direction.
On the 8th, the Financial Investigation Division 2 of the Seoul Southern District Prosecutors' Office indicted Kim on charges of violating the Capital Markets Act. Former Kakao CEO Hong Eun-taek and former Kakao Entertainment CEO Kim Sung-soo were also indicted without detention on similar charges. This brings the total number of individuals facing trial, including Bae Jae-hyun, Head of Investment Governance, Kang Ho-jung, Head of Investment Strategy, and Ji Chang-bae, Chairman of One Asia Partners, to six, along with the corporate entities Kakao, Kakao Entertainment, and One Asia Partners.
Kim is accused of manipulating SM Entertainment's stock price to interfere with a rival bid by HYBE by keeping SM Entertainment's share price higher than HYBE's tender offer price of 120,000 won.
According to the prosecution, Kakao engaged in illegal stock manipulation over 533 transactions, spending 240 billion won in the process. In collaboration with private equity firm One Asia Partners, Kakao purchased SM Entertainment shares worth 110 billion won on February 16, 17, and 27 of last year. On February 28, Kakao and Kakao Entertainment deployed an additional 130 billion won to acquire shares. Moreover, on February 27, Kakao issued a statement expressing its interest in participating in the acquisition, deliberately inflating SM Entertainment's stock price, and even used funds unrelated to the entertainment sector. A prosecutor noted that the orders involved high-price purchases, volume exhaustion, and closing price manipulation—classic indicators of market manipulation intended to lure investors.
Prosecutors have identified Kim, the ultimate decision-maker within the Kakao group, as the one who ordered the manipulation. Initially, when prosecutors requested Kim's arrest warrant last month, they cited only the manipulation on February 28, but further investigation revealed his involvement in the other three days as well.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
