Kakao on Kim Beom-su's Arrest: "Minimizing Gap Centered on Co-Chairman Jeongsin-ah"

Kakao founder and Management Innovation Committee Chairman Kim Beom-su, suspected of 'SM Entertainment stock price manipulation,' is attending a pre-arrest detention hearing at the Seoul Southern District Court on the 22nd. Photo by Kim Hyun-min kimhyun81@

Regarding the detention of Kim Beom-su, the founder and Management Innovation Committee Chairman of Kakao, on charges of manipulating SM Entertainment (SM) stock prices, Kakao announced that it will minimize the management vacuum with CEO Jeong Sin-ah at the center.

Kakao stated on the 23rd, "Although the current situation is regrettable, we will do our best to minimize the management vacuum with CEO Jeong Sin-ah, co-chair of the CA Council." In the CA Council, which serves as the group's control tower, Kakao CEO Jeong Sin-ah shares the co-chair position with Chairman Kim.

Earlier, Judge Han Jeong-seok of the Seoul Southern District Court, responsible for warrant hearings, issued an arrest warrant for Chairman Kim, who is accused of violating the Capital Markets Act, citing concerns over evidence tampering and flight risk.

According to the prosecution, Chairman Kim is accused of manipulating stock prices to set them higher than the public tender offer price of 120,000 KRW by competitor HYBE, in order to obstruct HYBE's public tender during Kakao Entertainment's acquisition of SM last February.

Regarding this case, Kakao is believed to have mobilized approximately 240 billion KRW over four days?February 16-17 and 27-28, 2023?together with the private equity firm One Asia Partners, purchasing SM shares 553 times at high prices. However, it is known that the arrest warrant request for Chairman Kim only specifies the stock price manipulation charge for February 28.