Kakao Investigates Financials at K-Pop Label SM After Deal
- Kakao took control of SM Entertainment after battle with rival
- South Korea is investigating Kakao’s pracices during the clash
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South Korea’s Kakao Corp. is investigating the financial practices of SM Entertainment Co. after it took a controlling stake in the K-pop pioneer, adding another chapter to a drama that has captured the attention of the nation’s business leaders.
Kakao, an internet and messaging powerhouse, has hired a law firm to probe SM’s books at the request of Kakao board’s audit committee, according to a person familiar with the situation who asked not to be identified because the matter is private. Kakao’s inquiry is focused on investments that SM management made after Kakao boosted its holding.