Financial Supervisory Service Chief on 'Kakao Investigation': "Actively Reviewing Corporate Punishment... Referral to Prosecution This Week"
Regarding the allegations of market manipulation involving Kakao's SM Entertainment (SM), Lee Bok-hyun, Governor of the Financial Supervisory Service, stated that "the possibility of corporate punishment will be actively considered."
On the 24th, after the 'Finance Day' ceremony held at the 63 Convention Center in Yeouido, Governor Lee told reporters, "We are actively and comprehensively reviewing whether to impose penalties on the corporation concerning the recent issue (Kakao). We expect to clarify our position as we transfer the case to the prosecution within this week."
This remark about 'corporate punishment' is interpreted as a response to concerns that penalties against Kakao's management could lead to penalties against the Kakao corporation itself, potentially affecting the suitability of Kakao Bank's major shareholders.
He added, "We have repeatedly warned against illegal activities by those with power or money, and those who can operate within the system. The recent incident occurred after our warnings, and due to its significant impact on the market, we will respond strictly and swiftly regarding the responsibilities of those involved."
Previously, the Financial Supervisory Service's Capital Market Special Judicial Police (Special Judicial Police) summoned Kim Beom-su, founder of Kakao and head of the Future Initiative Center, as a suspect and conducted an investigation lasting over 16 hours. The Special Judicial Police reportedly investigated whether he directly ordered or was informed about the market manipulation allegations.
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On the 13th, the Special Judicial Police also applied for arrest warrants against three individuals, including Bae Jae-hyun, Kakao's Chief Investment Officer, on charges of violating the Capital Markets Act related to market manipulation suspicions. Bae was detained. They are accused of investing approximately 240 billion KRW in February to raise SM's stock price above the public tender offer price by HYBE, the opposing party in the SM management rights acquisition battle, with the intent to obstruct HYBE's public tender offer.
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