Financial Supervisory Service (FSS) chief Lee Bok-hyun declared that the inquiry into purported stock manipulation by social media giant Kakao Corp. is being conducted “by the book” on Friday during a parliamentary audit of his agency. This came after the questioning of Kakao founder Kim Beom-su earlier this week concerning the company’s investments of some 240 billion won (US$177.9 million) to raise the stock price of K-pop powerhouse SM Entertainment, following the acquisition of a 14.8 percent stake in SM by another K-pop giant Hybe.
Kakao’s chief investment officer, Bae Jae-hyun, was arrested earlier this month on suspicion of stock manipulation. The FSS sent three Kakao executives, along with Kakao Corp. and its entertainment subsidiary, to the prosecution Thursday for further investigation and potential indictment. Lee Bok-hyun’s comments confirm that the investigation is being conducted in accordance with the law.