SEOUL, Nov. 13 (Yonhap) — Prosecutors indicted the chief investment officer of South Korean platform giant Kakao Corp. on Monday over alleged stock manipulation in a high-profile battle to take over K-pop powerhouse SM Entertainment Co.
Bae Jae-hyun will stand trial on charges of inflating the price of SM Entertainment shares in violation of the Capital Market Act, with the intent to undermine a tender offer from rival bidder Hybe during the heated takeover battle in February, the Seoul Southern Prosecutors Office said.
Kakao Corp. was also indicted in accordance with the penal provision that punishes both the company and the employee, the prosecution said.
Bae was arrested last month.
He is accused of purchasing some 240 billion won (US$181.3 million) worth of SM shares to inflate their price during the takeover battle.
Hybe, the parent company of K-pop superband BTS’ management agency BigHit, acquired a 14.8 percent stake in SM from its founder Lee Su-man.
Hybe had offered to buy up SM shares from small shareholders at 120,000 won per share, but it later withdrew its takeover bid when SM shares significantly jumped.
Bae and two other executives are also accused of not reporting their stockholdings to regulators. The two executives were indicted without detention.
Kakao founder Kim Beom-su has also been called in for questioning.
In March, Kakao and Kakao Entertainment became the controlling shareholder in SM Entertainment after acquiring a 39.87 percent stake in the agency.