On August 8, KST, the Seoul Southern District Prosecutor’s Office, indicted Kim Beom Soo, the founder and chairman of Kakao, for violating the Capital Market Act. This indictment marks a significant turn in the ongoing legal drama, as Kim will face trial while in detainment.
The Kakao Chairman faces trial for allegedly manipulating SM Entertainment stock prices during a high-profile acquisition battle
Moreover, charges against Kim Beom Soo are severe, centering around allegations that he manipulated the stock prices of SM Entertainment in February 2023. At that time, HYBE Labels, a major competitor, had issued a tender offer at 120,000 KRW per share in a bid to acquire SM Entertainment.
In a bold move to thwart HYBE’s acquisition, Kim Beom Soo, alongside Kakao, allegedly conspired with the private equity firm One Asia Partners. Together, they reportedly mobilized over 240 billion KRW (approximately $175 million USD), purchasing a significant amount of SM stocks at inflated prices. This strategic action was intended to fix SM’s stock prices above HYBE’s offer, effectively blocking HYBE from securing a controlling stake in the company.
Kim Beomsoo has been arrested and indicted for SM stock price manipulation.
Per this article, he can be held in detention during trial for 2 months, extended up to 6 months https://t.co/F4BqRp8b9Z
— TMIKpop (@tmikpop) August 8, 2024
In addition to Kim Beom Soo, former Kakao CEOs Hong Eun Taek and Kim Sung Soo were also implicated in the scheme. Both were indicted on the same charges, although they will face trial without detainment.
The indictment of such high-profile figures has sent shockwaves through the business community and beyond. With the trial looming, the outcome could have far-reaching implications for corporate governance and market practices in South Korea.
As the case unfolds, many are watching closely to see how this legal battle will impact not only Kakao and SM Entertainment but also the broader entertainment and tech industries.