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Photo courtesy of Korea Zinc |
[Alpha Biz= Paul Lee] Seoul – Young Poong Corp., the largest shareholder of Korea Zinc, claimed on September 5 that Korea Zinc Chairman Choi Yoon-bum and senior executives were aware that funds invested in the Havana No.1 Fund would be used to purchase shares of SM Entertainment as part of a stock manipulation scheme.
Young Poong cited internal Korea Zinc emails disclosed in court proceedings as evidence suggesting the company’s involvement in collusion related to SM Entertainment stock trading.
According to Young Poong, on February 10, 2023, Bae Jae-hyun, Head of Investment at Kakao, requested Ji Chang-bae, CEO of One Asia Partners, to purchase KRW 100 billion worth of SM Entertainment shares. Subsequently, on February 14—while HYBE’s tender offer was underway—an email sent to a Korea Zinc executive stated: “One Asia Partners plans to set up a project fund to acquire SM Entertainment shares. The shares may be sold to HYBE at KRW 120,000.”
The email, written shortly after HYBE’s tender offer began, allegedly indicated that Korea Zinc’s participation was not a mere financial investment. Young Poong asserted that One Asia Partners’ request was effectively aimed at supporting a share manipulation structure.
At the time, One Asia Partners purchased SM Entertainment shares at an average price of around KRW 125,000, higher than HYBE’s tender offer of KRW 120,000. This buying spree lifted SM’s share price above HYBE’s bid, ultimately leading to the failure of HYBE’s tender offer—an allegation at the center of the prosecution’s case.
On February 15, 2023, one day after the email exchange, Korea Zinc invested KRW 99.8 billion into the Havana No.1 Private Equity Fund, managed by One Asia Partners, followed by an additional KRW 1.8 billion investment on February 24, bringing the total to KRW 101.6 billion. Korea Zinc was the sole limited partner, holding a 99.82% stake in the fund.
The fund subsequently purchased large volumes of SM Entertainment stock on the open market. Prosecutors allege this activity was intended to thwart HYBE’s takeover attempt by manipulating SM’s share price.
In connection with the case, prosecutors have sought heavy sentences against Kakao founder Kim Beom-su, One Asia Partners CEO Ji Chang-bae, and several current and former Kakao executives on charges of violating the Capital Markets Act.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
