Judge Han Jeong-seok of the Seoul Southern District Court issued an arrest warrant for Kim, citing concerns that he may destroy evidence and flee.
The prosecution requested the arrest warrant last Wednesday on charges of violating the Financial Investment Services and Capital Markets Act.
Prosecutors claimed that Kim manipulated the stock price of the K-pop agency in February 2023 to obstruct a public tender offer by HYBE, the entertainment giant behind BTS.
He allegedly inflated the stock price above the offer price of 120,000 won ($86.5).
HYBE acquired a 14.8 percent stake in SM Entertainment from its founder, Lee Soo-man. Although HYBE initially offered to buy SM shares from minority shareholders at 120,000 won each, it withdrew its takeover attempt after SM's stock price surged.
Prosecutors believe Kim was briefed in advance about the large-scale stock purchase plan and approved it.
He is also accused of violating disclosure obligations by failing to report his holding of more than 5 percent of SM's shares to financial authorities.
reporter
Kim Joo-heon
jhkim123@ajunews.com
