Hybe, the Korean entertainment agency behind BTS, announced on Tuesday that it has submitted a petition to the Financial Supervisory Service asking for an investigation into a "suspicious" large purchase deal of SM Entertainment stocks.

The request comes amid Hybe’s bid to take over its rival agency after becoming its largest shareholder.

“On Feb. 16, an abnormal purchase of 2.9 percent (683,398 shares) of SM's issued shares took place at IBK Investment Securities’ Pangyo branch. There are suspicions of a violation of the Capital Markets Act,” Hybe said in a statement.

The entertainment giant further explained that since this transaction occurred during a critical period when SM Entertainment’s stock price surged to 130,000 won ($98), it strongly suspects that the purchase was made to manipulate the market price to interfere with its tender offer.

Hybe became SM Entertainment's biggest shareholder after signing a deal with the agency's founder Lee Soo-man, buying a 14.8 percent stake for 422.8 billion won.

On Feb. 10, Hybe announced a tender offer for SM Entertainment’s shares held by minority shareholders. It planned to secure up to 25 percent in SM Entertainment through this offer to gain stable management control over its rival company.

As Hybe offered 120,000 won per share, if the stock price moves above this level, it is likely that minority shareholders will not take Hybe’s tender offer. The stock price of SM Entertainment stayed below 120,000 won until Feb. 14. However, it started rising and on Feb. 16 surged to an all-time high of 133,600 won.

SM Entertainment’s stock on Tuesday closed at 127,600 won, up 7,300 won from the previous trading day and also above Hybe's offered price.

Industry insiders see that this means even shareholders who took Hybe’s tender offer between Feb. 10-14 when the stock price was lower than 120,000 won could have canceled their deals before the offer ended on Tuesday.

The feud between SM Entertainment’s founder Lee and the agency’s executives intensified at the beginning of this month, when co-CEOs Lee Sung-soo and Tak Young-jun laid out a blueprint for the company's new chapter under a new strategy called “SM 3.0” which cuts Lee out of the picture. Lee was previously the main producer at the agency.

At the time, South Korean tech giant Kakao, who also supports the SM 3.0 plan, acquired a 9.05 percent stake in SM Entertainment and became the agency’s second-biggest shareholder.

Lee, who was the biggest shareholder with an 18.46 percent stake at the time, immediately said that it was illegal to issue convertible bonds to a third party (Kakao) when the agency is currently going through a business management dispute. Lee also filed a petition for a preliminary injunction, with a ruling likely to come in early March.

This was when Hybe got involved in the feud. On Feb. 22, SM Entertainment founder Lee joined hands with Hybe and signed a deal to buy Lee’s majority stake of 14.8 percent.

Most recently, Kakao announced on Monday that it will take all possible countermeasures against Hybe’s attempt to increase ownership of SM Entertainment. Many industry insiders here considered that this statement indicates Kakao's strong will to acquire more shares in the agency.

"We can no longer tolerate the current situation that threatens the existence of our partnership with SM Entertainment," Kakao said in a statement.

This feud will likely continue until SM Entertainment's regular shareholders' meeting, slated for March 31.