South Korean entertainment giant SM Entertainment is currently facing investigations into allegations of stock price manipulation in collaboration with Kakao, a South Korean internet company. As part of the ongoing investigations, the company has reportedly demanded that its employees submit their laptops and mobile phones.
According to an SM official, the company’s management ordered its employees, including CFO Jang Cheol-hyeok, to submit their electronic devices. Jang Cheol-hyeok was in charge of leading SM’s acquisition, and his involvement in the investigation is particularly significant. Employees who refuse to comply are said to face the risk of resignation.
The investigations come after the Financial Services Commission’s Capital Market Investigation Department conducted a raid at Kakao and SM Entertainment’s headquarters. The regulatory body is looking into suspicions of price manipulation by Kakao’s bulk buying of SM shares during Hive’s open stock purchase offer.
Some SM Entertainment employees have posted their complaints about the issue on an online community for workers called “Blind.” The investigation could have serious implications for the management of SM and other companies involved in Hive’s stock price manipulation, including Align Asset Management.
If it turns out that SM and Align Asset Management were involved in Hive’s stock price manipulation, SM and Align’s management could become the focus of the investigation. The investigations into the alleged stock price manipulation are still ongoing, and it remains to be seen what the outcome will be.