Prosecutors began questioning Kakao Corporation founder Kim Beom-su facing allegations of stock manipulation in the company's acquisition of SM Entertainment, after he was placed under pretrial detention early Tuesday due to concerns over destruction of evidence and fleeing.

The Seoul Southern District Prosecutors' Office on Wednesday started grilling Kim at 10 a.m., a day after he failed to respond to the agency's summons, citing health reasons.

Kim and other company executives are accused of inflating the share prices of SM, one of the country's K-pop powerhouses, in a bid to obstruct a takeover earlier this year by Hybe, the parent company of BTS' management agency BigHit Music.

Prosecutors suspect Kakao schemed with a private equity fund operator to purchase around 240 billion won, or some 173 million U.S. dollars, worth of SM shares, driving up prices well above the 120-thousand won per share Hybe was offering small shareholders, thereby undermining Hybe's tender offer.

Hybe eventually suspended the bid, allowing Kakao and its subsidiary to jointly secure a nearly 40-percent stake in SM to gain management control. Kakao is also accused of failing to fulfill the compulsory declaration on their stock acquisition.

Kim is set to be detained for a maximum of 20 days.