[Alpha Biz=(Chicago) Reporter Kim Jisun] HYBE, which has become the largest shareholder of SM Entertainment (hereinafter referred to as SM), has put the brakes on SM's attempt to acquire its own shares.
The HYBE sent an official letter to SM's board of directors on the 23rd, warning that the acquisition of additional treasury shares currently being considered by SM are clearly illegal, which could constitute market price manipulation and criminal breach of trust strictly prohibited by the Capital Markets Act. He also called for the SM board's position on the request to suspend the acquisition of treasury stocks by the 27th.
According to the stock trading system and the Korea Exchange's corporate disclosure channel on the 22nd, SM has used about 3 billion won in cash to acquire its own shares and is expected to use up to 3.8 billion won in cash to acquire its own shares.
In this regard, HYBE explained, "Despite the recent stock price of more than 120,000 won, the act of buying our own shares using large-scale company funds cannot be seen as purely aimed at 'boosting stock prices and enhancing shareholder profits,' and we cannot help but suspect the intention of manipulating the market price to interfere with our open purchase process."
HYBE became a SM 1 shareholder by paying 422.8 billion won for a 14.8% stake in Lee Soo-man, former general producer of SM on the 22nd, 12 days earlier than scheduled.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
