Kakao's Kim Beom-su: "SM Price Manipulation Allegations Are Not True... Never Gave Illegal Orders"

Temporary Group Council Holds Meeting to Discuss Emergency Measures

Kim Beom-su, Chairman of Kakao Management Innovation Committee
Photo by Kakao

Kim Beom-su, Chairman of Kakao's Management Innovation Committee, emphasized that "he has never instructed or condoned any illegal activities" in relation to the arrest warrant request filed against him on suspicion of market manipulation concerning the acquisition of SM Entertainment.

On the 18th, Kakao announced that Chairman Kim, CEO Jeong Shin-ah of Kakao, and CEOs of major affiliates belonging to the CA Council held an emergency group meeting to discuss current group issues.

At the meeting, Chairman Kim stated, "It is regrettable to face such a situation while group members are working together to focus on management innovation and AI-based innovation. Although I cannot provide detailed explanations as the matter is ongoing, the charges currently being faced are not true. Since I have never instructed or condoned any illegal acts, I believe the truth will eventually be revealed."

He continued, "Despite the difficult situation, especially at times like this, let us strive even harder to carry out reforms that meet public expectations and fulfill our responsibilities as a leading Korean tech company. I will do my best to promote co-growth with various social stakeholders and enhance shareholder value."

CEO Jeong also said, "Under a serious recognition of reality, we will boldly execute the necessary tasks. I hope employees remain steadfast and focus on their core duties."

The meeting was convened at the initiative of group CEOs who shared the view that Chairman Kim's legal risks related to the SM acquisition could affect the overall group management, making it necessary to assess the current situation and discuss countermeasures.

Meanwhile, the Financial Investigation Division 2 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Jang Dae-gyu) filed an arrest warrant request against Chairman Kim on the 17th on charges of violating the Capital Markets Act. The pre-arrest detention hearing for Chairman Kim is scheduled for 2 p.m. on the 22nd.

Chairman Kim is suspected of manipulating the market last February by setting and fixing SM's stock price higher than the public tender offer price of 120,000 won by competitor HYBE.

It is known that during the prosecution's summons investigation, Chairman Kim testified that he was informed of the agenda to purchase shares but did not receive reports on the specific process.