South Korea's financial regulator raided the headquarters of SM Entertainment Co. on Tuesday over suspicions that South Korean tech giant Kakao Corp. manipulated stock prices in the process of acquiring shares of the K-pop powerhouse, according to financial sources.
The Financial Supervisory Service (FSS) has been investigating the allegations after Hybe, SM's rival agency behind global superstar BTS, filed a petition for a probe into the case with the FSS in February.
Hybe was Kakao's rival in the bidding war to take over the management rights of SM, the entertainment agency behind EXO, Aespa and NCT.
Last month, Kakao won the battle by securing a 40 percent stake in SM, becoming the largest shareholder of the agency.
In February, Hybe accused Kakao of manipulating SM's stock prices through another company to hinder Hybe from making a tender offer to secure a larger stake in SM.
Hybe initially bought a 14.8 percent stake in SM Entertainment from SM founder Lee Su-man but later halted its takeover bid following an agreement with Kakao a few days after Kakao's tender offer started March 7.
Earlier this month, the FSS also raided offices of Kakao and its entertainment unit, Kakao Entertainment Corp., as part of the probe.
Source: Yonhap News Agency