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| A branch office of the state-run National Pension Service (NPS) in downtown Seoul / Korea Times file |
By Yi Whan-woo
The National Pension Service (NPS) announced on Friday that it unloaded more than half of its stake in K-pop powerhouse SM Entertainment amid an escalating ownership feud over the company.
The ongoing feud is between two parties, with SM Entertainment founder Lee Soo-man and another K-pop company HYBE on one side, and SM's board and tech giant Kakao on the other.
The NPS said that it sold a total of 114,513 shares of SM Entertainment last month when HYBE acquired a 14.8 percent stake from Lee.
The state-run pension operator's stake in SM Entertainment fell to 4.32 percent from 8.96 percent.
The NPS did not give further details. However, industry sources say that it is believed to have reaped huge capital gains.
They noted that SM Entertainment's share price climbed sharply after HYBE purchased Lee's shares and became its largest shareholder.
HYBE is best known for its megastar boy group BTS.
Lee sold his shares after he became estranged from SM's board, which is led by his nephew, who has teamed up with Kakao to gain control of management rights.
"SM's stake was worth around 120,000 won per share as the management rights battle intensified, up from 20,000 won to 30,000 won per share in January," a source said.
Another source speculated that the NPS may have earned 117.9 billion won through selling off its SM shares.
A third source sees the share sale as the NPS wanting to retrieve its record-high investment losses of 2022 and placate public concerns over its management capabilities.
The NPS reported an operating rate of return of 8.22 percent last year, marking the worst in its history amid the rapid depletion of the pension fund.
Meanwhile, HYBE is attempting to buy off minority shareholders' stakes via a tender offer so as to acquire a stake of more than 40 percent. It needs at least 30 percent of SM shares to fully acquire management rights.
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