Kakao founder questioned over stock manipulation charges

Kim Beom-su, the founder of internet giant Kakao Corp., appears at the Financial Supervisory Service (FSS) in Seoul, Monday, to be questioned over the firm's suspected stock manipuulation to acquire K-pop powerhouse SM Entertainment earlier this year. Yonhap

Kim Beom-su, the founder of internet giant Kakao Corp., is under scrutiny as the financial watchdog agency is widening its investigation into the firm’s alleged stock manipulation to acquire SM Entertainment earlier this year.

On Monday, he appeared before the Financial Supervisory Service (FSS) after being summoned for questioning on whether he was involved in the allegations.

As he entered the FSS building to be questioned, Kim did not respond when asked if he admits to the charges. Instead, he said he will faithfully cooperate with the investigation.

While the FSS did not give details concerning the probe into Kim, sources familiar with the matter said his questioning is affecting employee morale in the midst of risks facing the firm’s leadership.

“This is something far more serious than being summoned by the National Assembly,” a source said.

The source added that Kim has been targeted by politicians after Kakao Corp. was increasingly criticized for emulating the family-owned business conglomerates, known as chaebol, who expanded into a wide range of businesses.

The source also noted that Bae Jae-hyun, chief investment officer of Kakao Corp., was arrested last week over the firm’s suspected stock manipulation in a bruising battle to win management control over K-pop powerhouse, SM Entertainment.

The battle was against another K-pop powerhouse, HYBE, which is best known for superband BTS.

Kakao's management is suspected of inflating the share price of SM in allegedly to obstruct a takeover bid by HYBE.