Allegations of Violating the Capital Markets Act
Prosecutors investigating allegations of market manipulation by Kakao during the SM Entertainment (SM) management rights dispute have conducted the first summons interrogation of Kim Beom-su, Kakao’s Management Innovation Committee Chairman and founder.
On the 9th, the Financial Investigation Division 2 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Jang Dae-gyu) announced that they had summoned Chairman Kim since the morning for investigation on charges of violating the Capital Markets Act related to SM market manipulation.
Last February, during the competition with HYBE over SM’s corporate control, suspicions arose that Kakao conspired with private equity firm One Asia Partners and others to raise and fix SM’s stock price above the public tender offer price of 120,000 won. Prosecutors are focusing on whether Chairman Kim gave instructions or approval during this process.
Earlier, the Capital Markets Special Judicial Police (Special Judicial Police) of the Financial Supervisory Service referred Chairman Kim and others to the Southern District Prosecutors' Office in November last year on charges of violating the Capital Markets Act. Subsequently, prosecutors conducted a search and seizure at Kakao based on investigation materials. In addition, Bae Jae-hyun, Kakao’s Head of Investment, and Ji Mo, CEO of the private equity firm One Asia Partners, have been indicted, and it is also known that recently Hwang Tae-seon, General Director of the CA Council, was summoned for questioning.
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