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[Alpha Biz=(Chicago) Reporter Kim Jisun] Bae Jae-hyun, head of Kakao's investment division, who is suspected of manipulating SM Entertainment's market price, has been arrested by prosecutors.
On the 18th, Kim Ji-sook, a senior judge in charge of warrants at the Seoul Southern District Court, conducted questioning of three suspects, including Bae Jae-hyun, head of investment strategy at Kakao, and head of investment strategy at Kakao Entertainment. As a result, an arrest warrant was issued for CEO Bae, saying, "There is a considerable concern about flight and destruction of evidence."
Regarding the other two, excluding CEO Bae, he/she rejected the arrest warrant, saying, "As a result of the investigation, it is difficult to say that there is a risk of fleeing or destroying evidence beyond the scope of legitimate defense, and the position and degree of involvement were considered."
They are suspected of manipulating stock prices by investing 240 billion won in the SM Entertainment management dispute with the aim of hindering the then rival Hive's tender purchase.
There is also a charge of violating the 5% rule (if the stake exceeds 5%, it must be reported in bulk). Kakao and Kakao Entertainment bought 1,054,341 shares of SM Entertainment through an in-house transaction on February 28, the last day of the public purchase. This is 4.43% of SM Entertainment's total 23,814,401 shares, which is interpreted as confirming the private equity fund's involvement in the prosecution's alleged violation of the 5% rule. On February 16, when Hive was in the process of public purchase, private equity funds such as One Asia Apartments and Helios No. 1 Limited purchased SM Entertainment shares through a specific window.
The Seoul Southern District Prosecutors' Office and the Financial Supervisory Service's special judicial police will continue their reinforced investigation into the market manipulation case.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
