SM Entertainment board votes to buy back 1% of stock

Industry

Published: 27 Feb. 2023, 18:49 Updated: 27 Feb. 2023, 19:28

SM Entertainment board votes to buy back 1% of stock

SM Entertainment headquarters in Seongsu-dong, eastern Seoul [YONHAP]

SM Entertainment’s board voted to buy back 241,379 shares for 63.5 billion won ($48 million), through the transaction was not completed.

The purchase would have been 1 percent stake of SM Entertainment's stock.

“Although the board approved the transaction on Monday, the deal was not seen through with the relevant securities company,” SM said in a public disclosure on Monday. “Therefore, the new deal will not actually be concluded, and we will announce a revised public disclosure at a later date.”

Shinhan Securities was handling the transaction.

On Feb. 21 and 22, SM had bought back 56,194 shares with 6.8 billion won of cash, according to Korea Investor’s Network for Disclosure System.

HYBE slammed SM’s latest attempt as “evident malpractice” and demanded SM to stop what it calls an illegal maneuver.

“SM Entertainment’s current management is engaging in illegal conduct by approving SM board’s decision to acquire 63.5 billion won of its own shares, 10 times more than its previous scale,” HYBE said in a statement Monday.

“If financial institutions are not cooperating with SM’s attempt to buy back its own shares, it’s because they have recognized that the move is illegal.”

SM’s move “demolishes order in the capital market,” HYBE criticized.

“SM management, which approved the deal, can face legal responsibility,” said HYBE. “We are also deeply concerned that it will hurt SM’s brand value. We urge SM management to perform its duties within the law.”

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]