Kakao founder Kim Beom-su arrested for SM Entertainment stock manipulation

Industry

Published: 23 Jul. 2024, 05:52 Updated: 23 Jul. 2024, 06:12

Kakao founder Kim Beom-su arrested for SM Entertainment stock manipulation

Kakao founder Kim Beom-su walks out of the Seoul Southern District Court on Monday after a hearing. [YONHAP]

A court issued a warrant for the arrest of Kakao founder Kim Beom-su Tuesday on charges of stock price manipulation.

The Seoul Southern District Court stated that there are reasonable grounds to believe that the suspect may attempt to escape or to destroy evidence.

Kim attended a 3.5-hour court hearing on Monday two weeks after being questioned by prosecutors about his alleged involvement in Kakao's inflation of SM Entertainment's shares.

The Seoul Southern District Prosecutor’s Office accused Kim of violating the Financial Investment Services and Capital Markets Act and filed a request for the warrant last Wednesday.

Kakao is accused of having colluded with private equity fund OneAsia Partners to artificially inject 240 billion won ($173.8 million) into the market to inflate of SM Entertainment shares between Feb. 16 and 17 and Feb. 27 and 28 in 2023 in order to block competitor HYBE from acquiring them.

Kakao ultimately came out as the winner in the takeover, allowing it and subsidiary Kakao Entertainment to jointly secure a 39.87 percent stake in SM Entertainment.

BY CHO YONG-JUN [cho.yongjun1@joongang.co.kr]