[Featured Stock] Kakao Falls Over 1% Amid Search of Founder Kim Beom-su's Office

Kakao is showing weakness following news that the Financial Supervisory Service's Capital Market Special Judicial Police (Special Judicial Police) conducted a search and seizure.

As of 9:55 a.m. on the 11th, Kakao was trading at 52,100 KRW, down 0.95% from the previous close. It had dropped as much as 3.80% shortly after the market opened.

The Financial Supervisory Service's Special Judicial Police conducted a search and seizure at the office of Kim Beom-su, Kakao's founder, in connection with allegations of market manipulation that surfaced during the SM acquisition battle the day before. The Special Judicial Police and prosecutors investigating the case had previously conducted searches at the headquarters of Kakao, Kakao Entertainment, and SM in April.

The Financial Supervisory Service is reported to have detected signs of involvement in manipulating SM's stock price. Earlier, in February, when a management dispute arose at SM, Lee Soo-man, former SM chief producer, signed a contract transferring most of his shares to HYBE, which also launched a public tender offer. During this process, suspicions of market manipulation emerged. HYBE filed a complaint with the Financial Supervisory Service, stating that during the public tender offer period, an abnormal purchase amounting to 2.9% of SM's total issued shares occurred at the IBK Investment & Securities Pangyo branch. Kakao and HYBE agreed to halt the management dispute, and in March, Kakao succeeded in acquiring SM by publicly purchasing shares at 150,000 KRW per share.

On the 17th of last month, Financial Supervisory Service Governor Lee Bok-hyun 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."

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