Reported by Song Jung-a

A top executive at Kakao has been arrested for alleged stock price manipulation during the South Korean internet giant’s heated acquisition battle for K-pop agency SM Entertainment this year.

The Seoul Southern District Court issued an arrest warrant for Kakao’s chief investment officer Bae Jae-hyun on Thursday. Financial regulators have accused him, along with two other Kakao executives, of buying Won240bn ($178mn) of SM shares in order to undermine a tender offer from rival bidder Hybe.

The court did not issue warrants for the other two executives. All three are also accused of not reporting their large stockholdings to regulators.

The Financial Supervisory Service had been conducting a wide-ranging investigation into Kakao and SM since February over the allegations.

Kakao took over SM after an intense bidding war with Hybe, the label behind K-pop sensation BTS. The battle sent SM’s stock price to a record high, but Hybe withdrew its bid in March after Kakao made a higher counter offer.

Bae’s lawyer has denied the charges against him, saying the SM stock purchase was legitimate.

Read full report: https://www.ft.com/content/02149d50-e517-4d38-b0a6-79e2f75d04fb