Kakao expressed regret over the prosecution’s request for the arrest warrant of its executives in the process of the SM Entertainment management rights dispute, in which it was alleged to be involved in market manipulation.
Kakao’s legal representative denied the allegations, stating that the stock purchases made to secure shares during the competition for SM’s management rights were legitimate and that there was no manipulation of stock prices. Kakao also stated that it regrets the arrest warrant request, as it did not cause any harm to HYBE or SM minority shareholders.
The Capital Market Special Judicial Police applied for the arrest warrant of Kakao’s Chief Investment Officer A, Investment Strategy Division Manager B, and Kakao Entertainment Investment Strategy Division Head C for alleged violations of the Capital Market Act, and the Southern District Prosecutor’s Office requested the arrest warrants.
According to the investigation, the suspects are accused of investing over 240 billion won to manipulate the stock prices of SM above HYBE’s public purchase price in order to obstruct HYBE’s public takeover bid during the competition for SM’s management rights in February. The Special Judicial Police also determined that the suspects did not comply with the obligation to report substantial holdings of SM stocks (5% rule). The prosecution and the Special Judicial Police conducted search and seizure operations at Kakao and Kakao Entertainment offices in April and seized Kim Beom-su, the founder of Kakao’s office in August.
Last month, the Special Judicial Police summoned and investigated Hong Eun-taek, CEO of Kakao, Bae Jae-hyun, Kakao’s Chief Investment Officer, Kim Sung-su, CEO of Kakao Entertainment, and Ji Chang-bae, Chairman of One Asia Partners.
Source: (A)
