Kakao founder Kim Beom-su indicted for stock manipulation in SM Entertainment takeover

Kakao founder Kim Beom-su was indicted by prosecutors on Thursday for stock manipulation related to Kakao's takeover of K-pop agency SM Entertainment, home to groups like aespa and NCT.

Kakao founder Kim Beom-su [YONHAP]

Kakao founder Kim Beom-su was indicted by prosecutors on Thursday for stock manipulation related to Kakao's takeover of K-pop agency SM Entertainment, home to groups like aespa and NCT.

Kim was initially arrested on July 23 and has now been further indicted. He is suspected of manipulating SM Entertainment shares by colluding with the private equity fund management company OneAsia Partners during the bidding war that pitted the messenger giant against another K-pop powerhouse, HYBE, for the acquisition.

The two parties are speculated to have artificially injected 240 billion won ($174 million) into the market to drive SM shares above 120,000 won in February 2023 to hinder HYBE’s attempt to acquire the stock.

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

The probe has been ongoing since February of last year, sparked by a report from HYBE requesting Korea’s financial regulator to investigate Kakao’s “abnormal” purchase of shares during the transaction.

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