Asia Tech Wire (July 9) -- Kim Beom-soo, the founder of South Korean tech giant Kakao Corp., came under questioning by prosecutors on Tuesday on suspicion of manipulating stock prices during his acquisition of South Korean K-pop agency SM Entertainment last year.

South Korean prosecutors said Kim underwent questioning at the Seoul Southern District Prosecutors' Office on suspicion of manipulating SM's stock.

The investigation focuses on the alleged manipulation of SM's stock price by Kakao and its executives in the bidding war for SM that started last February with Hybe, the owner of boy band BTS.

Hybe acquired 14.8% of the shares from SM founder Lee Soo-man and had offered to buy SM shares from minority shareholders at 120,000 won per share.

However, Hybe withdrew the acquisition plan after Kakao allegedly pushed SM's share price above 120,000 won per share through manipulation.

In March last year, Kakao and Kakao Entertainment acquired 39.87% of SM shares, making them the controlling shareholders of the K-pop agency.

South Korean prosecutors suspected that in mid- to late February last year, Kakao had purchased SM shares worth 240 billion won 553 times at a price higher than Hybe's offer price, in order to sabotage rival Hybe's buyout bid in the takeover battle.