Prosecutors conducted a search and seizure of Kakao Entertainment. The background is that 'allegations of market manipulation' were discovered during the SM Entertainment management dispute.
On the 6th, the Seoul Southern District Prosecutors' Office conducted a search and seizure of Kakao Entertainment's headquarters in Bundang-gu, Seongnam-si and its office in Jongno-gu, Seoul.
Suspicion of Kakao's 'interference in SM stock price' arose last February. Hive, which had previously competed to acquire SM, said, "We will secure up to 25% of SM Entertainment's stock at 120,000 won per share."
Afterwards, during the tender offer period, other corporations purchased SM Entertainment stocks in large quantities. During the same period, SM Entertainment's stocks exceeded the Hive tender offer price and faced the result of 'tender offer failure'.
At the time, there was talk in the industry that 'other corporations' were related to Kakao. In relation to this, Hive also filed a petition with the Financial Supervisory Service, saying, “There are circumstances in which certain forces are interfering with Hive’s tender offer by raising SM’s stock price.”
As a result of investigating the identity and transaction details of other corporations, the Financial Supervisory Service discovered circumstances that executives and employees within Kakao were intertwined.
The ‘SM management dispute’ ended with Kakao’s victory. Hive settled the dispute with Kakao in the direction of platform cooperation.
Kakao and Kakao Entertainment currently hold 20.78% and 19.13% of SM Entertainment's shares, making them the largest shareholders.
Reporter Junho Yoon, Ten Asia delo410@tenasia.co.kr