Financial Supervisory Service Investigates Large Accumulation of SM Shares... "Strict Response"

Large-scale Purchase of SM Shares Occurs Through IBK Investment & Securities Pangyo Branch
HYBE "Aims to Obstruct Tender Offer"

The Financial Supervisory Service (FSS) announced a swift investigation and strict response policy regarding the large-scale accumulation of SM Entertainment (SM) shares during the tender offer period.

On the 1st, the FSS stated concerning the unfair trading suspicions related to SM shares, "If anyone artificially maintained the stock price above the tender offer price during the tender offer process, such actions could be punished as market manipulation under the Capital Markets Act." It added, "In particular, despite the financial authorities' determination to establish market order, we will promptly launch an investigation and respond strictly to any acts that hinder fair price formation through large-scale stock accumulation during the tender offer period."

The FSS emphasized, "We will continue to closely monitor the series of processes related to management rights disputes of listed companies and strictly punish unfair trading acts that undermine the fairness of the capital market."

It also issued a compliance urging message to stakeholders. The FSS said, "We urge the parties involved in management rights disputes to compete fairly and to ensure that all procedures proceed lawfully," adding, "We ask investors to exercise caution in their investments so that reasonable investments can be made under the principle of self-responsibility."

Earlier, on the morning of the previous day, HYBE submitted a petition to the FSS requesting an investigation, stating, "On the 16th of last month, an abnormal purchase amounting to 2.9% (683,398 shares) of the total issued shares of SM occurred at the IBK Securities Pangyo branch. This is suspected of violating the Capital Markets Act." HYBE claimed that this transaction took place while SM's stock price surged from the tender offer price of 120,000 KRW to 130,000 KRW, arguing, "It is strongly suspected that this was done to manipulate the market price and obstruct HYBE's tender offer."

SM's stock price remained below 120,000 KRW from the tender offer announcement date on the 10th of last month until the 14th but soared to an all-time high of 133,600 KRW on the 16th. At that time, 15.8% of the total daily trading volume of SM shares was purchased at the IBK Pangyo branch. On the previous day (February 28), when the tender offer closed, SM's stock price closed at 127,600 KRW, higher than the tender offer price.

This content was produced with the assistance of AI translation services.