Kakao’s CEO was detained for allegedly obstructing HYBE’s acquisition and manipulating SM’s stock price

Kakao’s CEO was detained for allegedly obstructing HYBE’s acquisition and manipulating SM’s stock price
(Cover image source: HYBE, kakao, SM Entertainment)

The competition between kakao and HYBE for the largest shareholder of SM Entertainment in March was aroused. HYBE finally reached an agreement with kakao to no longer compete, and kakao won. However, what was subsequently revealed was a series of shady manipulations, and many senior executives of kakao were suspected of violating the capital market. Act (similar to the Fair Trade Act) to manipulate SM Entertainment’s stock price against competitor HYBE.

The latest news today (19th) is that Kakao General Manager Bae Jae-hyun (배재현) was issued an arrest warrant by the Seoul Southern District Court and is currently being held in the Yeongdeungpo Police Station Detention Center. The court’s reason is that there is evidence of Bae’s escape and annihilation. Yu. Bae Jae-hyun will be investigated while in custody and handed over to the prosecutor within 10 days.

According to the Capital Market Special Judiciary Police of the Financial Supervisory Service (Special Police), Representative Bae and others are suspected of investing more than 240 billion won in February to raise SM’s stock price to HYBE with the purpose of hindering SM’s acquisition of management rights in its battle with rival HYBE. Above the public acquisition price, he has not honestly informed the financial authorities that he holds a large number of SM shares.

The Financial Supervisory Service has been investigating Kakao and SM Entertainment since February, even though the takeover battle ended in March. In August, kakao founder Kim Bum-soo was also detained and searched for manipulating SM stock prices.

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