Bae Jae-hyun, head of investment, arrested
Expand investigation to overall management
Possibility of orders for gold, price manipulation, etc.
The Financial Supervisory Service, which is investigating SM Entertainment’s (SM Entertainment) stock price manipulation suspicions, will summon Kim Beom-soo, former chairman of the Kakao board of directors, for questioning on the 23rd. Following the arrest of Bae Jae-hyeon, Kakao’s head of investment, the investigation is expanding to all Kakao executives.
According to the Financial Supervisory Service on the 19th, the Special Judicial Police of the Financial Supervisory Service notified former Chairman Kim to appear by 10 a.m. on the 23rd. The Financial Supervisory Service’s special envoy is investigating allegations that Kakao invested 240 billion won in February for the purpose of interfering with the tender offer of Hive, a competitor in the bid to acquire SM Entertainment’s management rights, thereby raising SM Entertainment’s stock price above Hive’s tender offer price.
It is known that the Financial Supervisory Service suspects that former Chairman Kim may have received reports or ordered market manipulation. Last August, the Financial Supervisory Service searched and seized former Chairman Kim’s home and office, secured cell phones, etc. and conducted analysis. In particular, it has been reported that call recordings and text messages containing circumstances of market manipulation were obtained from the mobile phones of Kakao staff members.
CEO Bae, who is suspected of manipulating SM Entertainment’s market price, was arrested on this day. Kim Ji-sook, chief judge in charge of warrants at the Seoul Southern District Court, interrogated CEO Bae, who is suspected of violating the Capital Markets Act, from the afternoon of the previous day before arresting him (substantial examination of the warrant) and then issued an arrest warrant, saying, “There is concern about destruction of evidence and escape.” did. However, arrest warrants for Mr. Kang, head of Kakao’s Investment Strategy Department, and Mr. Lee, head of Kakao Entertainment’s Investment Strategy Division, for whom arrest warrants were also requested, were dismissed, saying, “The charges are serious, but it is difficult to see that there is a need or significance for their arrest.”
Hive and Kakao had a dispute over the acquisition of SM Entertainment early this year over a tender offer. During this process, suspicions of market manipulation arose as Hive claimed that “abnormal purchasing activities occurred.”
Kakao and Kakao Entertainment acquired 39.87% of SM Entertainment’s shares (20.76% and 19.11%, respectively) by March 28 through a tender offer, becoming the largest shareholders. After beginning its investigation in February, the Financial Supervisory Service conducted mandatory investigations into Kakao, SM Entertainment, and former Chairman Kim’s office.
Reporter Song Soo-yeon
2023-10-19 16:08:43
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