Prosecutors and financial authorities have conducted a search and seizure at the headquarters of SM Entertainment. This is to investigate allegations of market manipulation that arose during the process of Kakao's acquisition.
According to financial circles on the 18th, the Financial Investigation Division 2 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Chae Hee-man) began a search and seizure at SM Entertainment's headquarters located in Seongsu-dong, Seongdong-gu, Seoul, from 9 a.m. this morning, together with the Financial Supervisory Service's Special Judicial Police (hereinafter referred to as Special Judicial Police). More than 30 investigators were deployed for the search.
This search and seizure is interpreted as a measure following Hive Entertainment's statement in February that "a specific force is raising SM's stock price to obstruct Hive's public tender offer." At that time, the Financial Supervisory Service reportedly received a petition from Hive and forwarded it to the prosecution through the 'fast-track' procedure.
The Financial Supervisory Service and prosecutors are examining whether Kakao artificially influenced the stock price in violation of the Capital Markets Act during Hive's public tender offer for SM Entertainment shares.
In June, the Special Judicial Police conducted a search and seizure at Kakao's office building located in Seongnam-si, Gyeonggi-do, and Kakao Entertainment's office building in Jongno-gu, Seoul.
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