Kim Beom-su, founder of Kakao and Chairman of the Management Innovation Committee, has reportedly denied any involvement in stock price manipulation during last year’s acquisition of SM Entertainment’s management rights. During a prosecution investigation on July. 9 and 10, Kim stated that he did not collude with or instruct Bae Jae-hyun, the head of Kakao’s investment division, in any illicit activities. The prosecution is investigating Kim on charges of violating the Financial Investment Services and Capital Markets Act, which he has denied.
According to a comprehensive report by ChosunBiz on July. 11., Kim appeared at the Financial Investigation Division 2 of the Seoul Southern District Prosecutors’ Office at approximately 8:10 a.m. on July. 9. He was questioned for over 20 hours, until 4:45 a.m. the following day, July. 10. Kim avoided the press both when entering and leaving the office.
A special judicial police team from the Financial Supervisory Service (FSS) recommended Kim’s indictment to the prosecution on Nov. 15. last year. The issue originated in February last year when Kakao, along with Kakao Entertainment and private equity firm OneAsia Partners, spent 240 billion won (approximately $173.31 million) to purchase SM Entertainment shares 553 times at high prices. This was during the period when HYBE had announced a public tender offer at 120,000 won per share. The FSS and the prosecution suspect that Kakao inflated the stock price to obstruct HYBE’s tender offer.
The prosecution has already brought charges against Bae, who played a key role in the SM Entertainment acquisition, as well as against Kakao and Ji Chang-bae, Chairman of OneAsia Partners, for alleged conspiracy in price manipulation. Bae has denied these charges in court.
The prosecution has been investigating whether Kim was aware of or approved the price manipulation activities and colluded with Bae. However, Kim reportedly told the prosecution that he did not engage in any collusion.
With Kim refuting the conspiracy allegations, there is heightened anticipation regarding whether the prosecution will pursue an arrest warrant. The prosecution is expected to make a determination on their next steps in the near future.
