A prominent South Korean billionaire and technology entrepreneur was taken into custody on Tuesday for allegedly engaging in stock price manipulation of a leading K-pop agency during a transaction last year.
Kim Beom-su, the founder of the tech giant Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court has issued an arrest warrant due to concerns that he might flee the country or destroy evidence.
Kim, 58, denied the allegations during a staff meeting at Kakao, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company expressed its disappointment over the arrest.
He is believed to have interfered with the stock of SM Entertainment during a takeover bid last year, allegedly attempting to thwart another major K-pop agency, Hybe, from acquiring it.
SM Entertainment and Hybe are two of South Korea’s leading K-Pop enterprises, representing popular groups Aespa and BTS, respectively. Ultimately, Kakao secured the acquisition of SM Entertainment. Last year, Kakao’s chief investment officer was also indicted on charges of stock manipulation.
Founded in 2010 and based in Jeju City, Kakao, in which Kim holds approximately a 24% stake, employed over 10,000 individuals in 2020. At one point, Kim was recognized as South Korea’s wealthiest individual, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock price fell by 5%. An academic at Korea University Business School commented that this situation could represent Kakao’s most significant crisis, emphasizing the importance for the remaining leadership to demonstrate the company’s capability to thrive in Kim’s absence.