July 23, 2024, New York – JAKOTA Index Portfolios Inc. is responding to today’s news about the arrest of Kakao founder Kim Beom-su on stock manipulation accusations. JAKOTA Index Portfolios Inc. acts as a sponsor and index provider for the JAKOTA KPOP ETF listed in the USA (ticker: KPOP), where Kakao shares are the third-largest constituent with a 9.5% weight. The case against Kim Beom-su centers on his dealings with shares of another KPOP company, SM Entertainment, acquired by Kakao earlier. SM Entertainment is also a member of the JAKOTA K-Pop Index and one of the JAKOTA KPOP ETF holdings, with a 4.5% allocation.
Since acquiring the KPOP ETF in February 2024 from prior owners, JAKOTA Index Portfolios Inc. has been working relentlessly with many of its constituent companies to improve their corporate governance, transparency and quality of financial information disclosure. It has repeatedly delayed the marketing push for the newly rebranded JAKOTA KPOP ETF to a later date due to our persisting concerns related to the quality of governance in the Korean K-Pop industry. Specifically, JAKOTA Index Portfolios Inc. continues to withhold over $50 million in investment raised in December 2023, which has not yet been allocated to the JAKOTA KPOP ETF, pending satisfaction with the improvement of corporate governance among the core constituents of the JAKOTA KPOP ETF.
While with this statement we express no opinion or judgment related to Kim Beom-su’s case, JAKOTA Index Portfolios Inc. remains fully convinced of the lasting global growth opportunity for the spectacular K-Pop industry, its products and its artists. We are committed to working with the leading K-Pop companies to unlock their tremendous potential for international expansion and access to capital.
For more information, visit jakotaindex.com and kpopetf.com.
