In February 2023, the HYBE Labels - Kakao battle for SM Entertainment attracted much public attention. In the end, HYBE Labels sold all the shares purchased from former chairman Lee Soo Man to Kakao, giving up its ambition to take over SM.
Kakao and HYBE continuously raised the price of their shares, peaking at double the initial price, to gain control of SM. Finally, HYBE gave up, declaring to "stop playing the game" after "burning" 440 billion KRW on SM shares.
It seemed that after the deal ended, everything would be in the past, but since then, the case has had new developments, including the arrest of Kim Beom Su - founder of Kakao on suspicion of manipulating stock prices in this deal.
He has been summoned since July last year and is being tried for violating the Capital Markets Act.
Meanwhile, according to legal sources on the 13th of this month, HYBE Chairman Bang Si Hyuk was also summoned by the court to testify at the trial on the stock manipulation charges against Kim. Unless there are special circumstances, Bang is scheduled to appear in court for questioning on June 20.
Accordingly, prosecutors accused Kakao of colluding with private equity firm One Asia Partners and several other companies to manipulate the stock price, setting a price higher than HYBE's public offering price of 120,000 KRW (~85 USD) to prevent the acquisition of SM by billionaire Bang Shi Hyuk, the "father of BTS".
Kakao later won to buy an additional 35% of shares for 1.25 trillion won (960 million USD), becoming the largest shareholder of SM Entertainment.
Prosecutors are focusing on a meeting held on February 14, 2023, between Bang and Kim at a crucial moment in the SM Entertainment acquisition saga. Bang allegedly asked Kim not to pursue a takeover of SM. Despite this, Kim is said to have rejected HYBE’s proposal and continued with his plan to acquire SM Entertainment.
In a previous hearing, prosecutors explained the significance of the meeting: “Bang Shi Hyuk is the HYBE chairman who submitted a formal complaint to the Financial Supervisory Service, accusing Kakao of blocking a public tender offer by purchasing a large volume of SM shares. The February 14 meeting is a critical element of this case, which is why Bang has been called as a witness.”
The Seoul Southern District Prosecutors' Office, which is investigating the case, announced plans to subpoena Chairman Bang as a witness for Chairman Kim's trial in October 2024. The prosecution had previously summoned Chairman Bang for questioning as a witness during the investigation, but Chairman Bang did not appear.
Since April of the same year, Chairman Bang's HYBE has been suffering from the so-called 'HYBE - Min Hee Jin incident'. As internal audits and a resolution to fire Min Hee Jjin, the former CEO of subsidiary Adore, were conducted on charges of breach of trust, public outrage against HYBE has increased as issues involving multiple subsidiaries have come to light.
During this process, Chairman Bang Si Hyuk was caught with BJ 'Juicy Se Yeon' in LA, USA in August 2024, which further aroused negative public reactions. At that time, when the "HYBE - Min Hee Jin incident" caused fluctuations in Hybe's stock price and continued dissatisfaction among shareholders, there were criticisms that a problem equivalent to the owner's risk had arisen.
After that, many problems related to HYBE, its affiliated labels and subsidiaries were pointed out during the state audit, but even during this process, Chairman Bang remained silent.
Having lived abroad for a long time, he only appeared in photos with artists from the same company, including BTS, TXT, Le Sserafim, Katseye and did not share any his point of views. Chairman Bang's most recent official appearance in кσяєα was at the 64th regular general meeting of the кσяєαn Economic Association held on February 20.
