Financial Supervisory Service Conducts Search and Seizure at Kim Beom-su, Kakao Founder... SM Accused of Market Manipulation
Regarding the allegations of market manipulation that arose during the acquisition battle for SM Entertainment (SM), the Financial Supervisory Service (FSS) has conducted a search and seizure operation targeting Kim Beom-su, the founder of Kakao.
According to financial authorities on the 10th, the Capital Market Special Judicial Police (Special Judicial Police) of the FSS conducted a search and seizure at the office of founder Kim on the same day.
The Special Judicial Police, investigating the market manipulation suspicions, reportedly confirmed involvement by founder Kim and others and obtained a search and seizure warrant.
Earlier, in February, when the SM management rights dispute occurred, former SM Chief Producer Lee Soo-man signed a contract transferring most of his shares to HYBE, which also launched a public tender offer. During this process, suspicions of market manipulation surfaced. HYBE filed a complaint with the FSS, stating that during the public tender offer period, an abnormal purchase activity occurred at the IBK Investment & Securities Pangyo branch, amounting to 2.9% of the total issued shares of SM. Kakao and HYBE agreed to halt the management rights dispute, and in March, Kakao succeeded in acquiring SM by publicly tendering shares at 150,000 KRW per share.
Meanwhile, the Special Judicial Police and prosecutors investigating the case previously conducted search and seizure operations at Kakao, Kakao Entertainment, and SM headquarters in April.
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On the 17th of last month, Lee Bok-hyun, Governor of the FSS, told reporters, "We are confident in uncovering the facts," and emphasized, "If illegal activities are found, we will impose the highest possible level of sanctions." He added, "Not only in the SM case but also regarding any violations related to market order, we will respond strictly," and stated, "We plan to take all measures, including imposing the highest possible level of sanctions."
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