Kakao Denies Rumors of Selling SM Entertainment Shares

Kakao announced on the 29th that "the sale rumors are not true" in relation to reports about the sale of its shares in SM Entertainment.

Earlier, a media outlet reported that Kakao was conducting behind-the-scenes negotiations with NCSoft to sell its shares in SM Entertainment.

Photo by Yonhap News

Rumors about Kakao selling SM Entertainment have been intensifying since the end of last year. This is because the entire group fell into crisis after Bae Jae-hyun, the head of investment, was detained amid allegations of market manipulation that arose during Kakao's acquisition process of SM Entertainment.

In addition, Kakao is currently conducting audits on SM Entertainment's financial statements and executives at the request of the board's audit committee.

Kakao has also requested the submission of materials regarding the appropriateness of investments made by SM Entertainment after its incorporation into Kakao, without prior consultation with the headquarters, through an external law firm.

However, Kakao continues to deny the rumors of selling SM Entertainment. Regarding the rumors of dismissal of SM Entertainment's management, Kakao has drawn a line, stating that audit results have not yet been released.