Kakao founder and chairman Kim Beom-Soo has been indicted on charges of stock manipulation related to the company’s acquisition of SM Entertainment.
The Seoul Southern District Prosecutors’ Office announced on August 8th that Kim would face trial while in detention for violating the Capital Markets Act. The indictment alleges that Kim orchestrated a scheme … To manipulate SM Entertainment’s stock prices in February 2023 to thwart a rival takeover bid by HYBE.
To achieve this … Kakao mobilized over 240 billion won (USD 175 million) to purchase a significant number of SM shares at inflated prices. Kakao made the move working in collaboration with private equity firm One Asia Partners. This strategy aimed to drive up the stock price above HYBE’s tender offer price of 120,000 KRW per share.
Former Kakao CEOs Hong Eun Taek and Kim Sung Soo have also been indicted for their involvement in the scheme, though they will not be detained during the trial.
The case has sent shockwaves through the K-pop industry and raised questions about corporate governance and fair competition. As the legal proceedings unfold, the future of SM Entertainment remains uncertain.
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