Financial Supervisory Service Special Investigation Team Transfers Kakao Founder Kim Beom-su on Charges of Violating the Capital Markets Act

Kim Beom-su, former chairman of Kakao, is appearing at the Financial Supervisory Service on the 23rd of last month to be investigated regarding allegations of stock price manipulation in the acquisition of SM Entertainment (SM). Photo by Kang Jin-hyung aymsdream@

Kim Beom-su, founder of Kakao and head of the Future Initiative Center, has been handed over to the prosecution in connection with allegations of stock price manipulation involving SM Entertainment (SM).

According to financial authorities on the 15th, the Capital Market Special Judicial Police (Special Judicial Police) of the Financial Supervisory Service sent founder Kim Beom-su to the prosecution on charges of violating the Capital Markets Act. In addition, Hong Eun-taek, CEO of Kakao, Kim Sung-soo and Lee Jin-soo, co-CEOs of Kakao Entertainment, as well as two lawyers from a law firm, were also included in the transfer.

According to the Financial Supervisory Service, it was found that around February this year, they conspired to manipulate the price of SM shares above the public tender offer price of HYBE, a competitor in the SM management rights acquisition battle, with the intent to obstruct HYBE's public tender offer.

Earlier this year, HYBE and Kakao engaged in a dispute over the acquisition of SM through public tender offers. During this process, HYBE claimed that "abnormal purchase activities occurred," raising suspicions of price manipulation.

While investigating these allegations, the Special Judicial Police sent Kakao and Kakao Entertainment corporations, as well as Bae Jae-hyun, head of Kakao's investment division, to the prosecution on charges of violating the Capital Markets Act on the 26th of last month in relation to the SM stock price manipulation case. At that time, Kim Beom-su was not included in the transfer.

Subsequently, on the 13th, the Seoul Southern District Prosecutors' Office indicted Bae Jae-hyun on charges of violating the Capital Markets Act and detained him. Under the joint punishment clause, which punishes corporations when their executives violate the law, Kakao as a corporation was also indicted without detention.

With Kim Beom-su now transferred, the prosecution is expected to conduct additional investigations alongside Kang Mo, head of the investment strategy office, and Lee Mo, head of Kakao Entertainment's investment strategy division, who were previously transferred with Bae Jae-hyun, to determine whether to indict.

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