2023-10-22 09:38:06
Former Chairman Kim appears as a suspect today
Unusually, standing in front of the photo line
Observes confidence in the Financial Supervisory Service’s ability to substantiate the charges
Investigation into illegality of large purchases of SM stocks
“We must look at the intentionality of interfering with Hive’s acquisition.”
When Kim takes responsibility, Kabank’s majority shareholder status is shaken.
▲ Beomsoo Kim, former Chairman of the Board of Directors of Kakao
Kakao founder Kim Beom-soo, former chairman of the board of directors, will be investigated as a suspect by the Financial Supervisory Service on the 23rd on charges of market manipulation during the acquisition of SM Entertainment. A photo line for former Chairman Kim is unusually set up in front of the main gate of the Financial Supervisory Service. There are observations that the Financial Supervisory Service is showing confidence in proving the charges against former Chairman Kim.
On the 22nd, a Financial Supervisory Service official said, “We will set up a photo line in front of the main gate of the Financial Supervisory Service in relation to former Chairman Kim’s attendance,” adding, “This is a measure taken into consideration in case a large number of reporters gather.” Since the launch of the Financial Supervisory Service’s Capital Market Special Judicial Police (Special Investigation Police) in July 2019, this is the first time that the subject of investigation has been set up on the photo line and made public.
This official said, “There is no problem with Kakao making a tender offer (of SM Entertainment stocks) like Hive, but there appears to be circumstances where Kakao interfered with Hive’s tender offer.” Previously, Lee Bok-hyun, head of the Financial Supervisory Service, said in relation to the investigation into SM Entertainment’s market manipulation suspicions last July, “I have some confidence in uncovering the truth.”
The Financial Supervisory Service’s special envoy is investigating allegations that Kakao invested 240 billion won in February to hinder the tender offer of Hive, a competitor in the bid to acquire SM Entertainment’s management rights, thereby raising SM Entertainment’s stock price above Hive’s tender offer price.
In particular, we are looking into the possibility that Kakao attempted to manipulate the market by purchasing SM stocks in collusion with One Asia Partners, a nearby private equity fund management company. Kakao is also investigating whether the purchase of approximately 1 million SM shares through its affiliate Kakao Entertainment on February 28, the deadline for Hive’s stock tender offer, was illegal.
In relation to this, the Financial Supervisory Service is known to have summoned former Chairman Kim after suspecting that he may have been reported to or ordered market manipulation. Previously, on the 13th, the Financial Supervisory Service’s special envoy applied for arrest warrants for Bae Jae-hyun, Kakao’s general investment representative, Kakao’s investment strategy director, and three heads of Kakao Entertainment’s investment strategy division on charges of violating the Capital Markets Act. Among them, CEO Bae was arrested on the 19th.
The legal and financial circles believe that confirming whether there is collusion between Kakao and One Asia Partners will be the core of the investigation. Jeong Soo-ho, a lawyer at Renaissance Law Firm, said, “Given that CEO Bae, the second-in-command, has been arrested, it can be said that we have secured some relevant evidence,” adding, “The key will be to prove intent and purpose to thwart Hive’s acquisition of SM stocks.” “He said.
There are also observations that if former Chairman Kim takes legal responsibility, his status as the majority shareholder of Kakao Bank may be shaken. According to the Internet Bank Special Act, in order for an industrial capital to own more than 10% of the shares of an Internet bank, it must not have been punished by a fine or higher for violating finance-related laws, the Special Police Act, or the Fair Trade Act in the past five years.
Kakao has not yet revealed its official position. Previously, Kakao’s lawyers completely denied the related charges in a statement on the 13th, saying, “It was a legal purchase of stock on the market to secure shares in the process of competing for SM Entertainment’s management rights, and there was no evidence of market manipulation.”
Reporters Song Soo-yeon, Min Na-ri, and Yoo Gyu-sang
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