SEOUL — Kim Beom-su, founder of Kakao Corp., appeared in Seoul Southern District Court on Monday for a hearing regarding his potential arrest over accusations of stock price manipulation during Kakao’s acquisition of K-pop agency SM Entertainment.
According to Yonhap News Agency, the allegations center on Kakao and its executives manipulating the stock prices of SM Entertainment to thwart a competing bid by Hybe, the parent company of BTS's agency, BigHit, during a heated takeover battle last February. Prosecutors allege that Kakao purchased SM shares at prices significantly higher than those offered by Hybe in a deliberate effort to influence the outcome of the takeover. This purported manipulation involved Kakao buying shares worth 240 billion won on 553 separate occasions, ultimately leading Hybe to withdraw its bid.
Despite the accusations, Kim has consistently denied any wrongdoing, asserting at a recent Kakao affiliates meeting, "I believe the truth will eventually be revealed, because I have never instructed or condoned any illegal acts." He acknowledged being aware of the share purchases but denied knowledge of the specifics.
The case has escalated to the point where Kakao’s Chief Investment Officer, Bae Jae-hyun, and the company itself have been indicted on stock manipulation charges. The court's decision on whether to issue an arrest warrant for Kim is expected as early as late Monday.