South Korean prosecutors are seeking an arrest warrant for billionaire Kakao Corp founder Brian Kim, a surprise twist in their ongoing investigation into alleged stock market manipulation.

The Seoul Southern District Prosecutors’ Office is seeking to detain the celebrated entrepreneur after conducting a probe into alleged price-rigging that took place during a bidding war over SM Entertainment Co in 2023. A spokesperson for the office confirmed it had asked courts to issue an arrest warrant over charges related to the capital markets law, but declined to comment further.

The court will determine whether to issue the warrant after a hearing.

Kakao’s spokesperson denied the allegation, and said no illegal activities had transpired during the acquisition of SM, adding that a further explanation would be provided during the court hearing.

The company’s stock fell as much as 0.9% to 40,550 won (US$29 or RM137.36).

Kakao, the South Korean internet leader Kim created, won a controlling stake in SM after an intense bidding battle with Hybe Co, the label behind boyband sensation BTS. Financial regulators have accused executives at Kakao and Kakao Entertainment Corp of buying 240 billion won in SM shares, in an attempt to disrupt Hybe’s offer.

  - Bloomberg