Financial authorities and prosecutors raided Kakao Corp. on suspicion of stock price manipulation during its takeover of K-pop agency SM Entertainment. The Financial Services Commission sent a team of 40 investigators to Kakao and its affiliate Kakao Entertainment to seize internal documents and data. Authorities are investigating whether Kakao violated the Capital Markets Act during its battle with Hybe, the entertainment agency behind BTS, to take over SM. Kakao and Kakao Entertainment are accused of artificially inflating SM’s stock price to block Hybe from taking control of SM. Kakao may also have failed to comply with rules requiring a shareholder to file a public disclosure when acquiring more than 5% of a company’s outstanding shares.
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