On July 23, 2024, around 1 a.m. KST, Korean media outlets reported that a warrant had been issued for the arrest of Kakao founder Kim Bum Soo for the manipulation of SM Entertainment stocks.

He showed up at the South District Court in Yangcheon-gu, Seoul, in the afternoon on July 22, 2024, for questioning. The warrant was issued hours later.

Kakao and Kakao Entertainment previously underwent a raid by the Prosecutors and Financial Supervisory Service over suspicions of manipulating the stock market in April 2023.

Earlier, on February 28, 2023, Kakao and Kakao Entertainment purchased 4.43% of SM Entertainment’s issued shares, amounting to 1,054,341 shares, which constituted a significant portion of SM Entertainment’s trading volume at the time. Despite HYBE’s tender offer of ₩120,000 KRW per share (approximately $91.10 USD), the stock closed at ₩128,000 KRW (about $96.80 USD). HYBE’s attempt to acquire shares publicly failed due to the mismatch in the offered price. Subsequently, HYBE requested the FSS to investigate Kakao and Kakao Entertainment, alleging that they artificially inflated the stock price to obstruct the public acquisition. The case was then transferred to the prosecution for further investigation into potential unfair trading practices involving stocks.

You can read more about the case below.