A South Korean billionaire and technology entrepreneur was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of Kakao, has not been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him amid concerns that he might flee the country or tamper with evidence.
In a recent staff meeting at Kakao, Kim stated, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
Kim, 58, is accused of influencing the stock of SM Entertainment during a takeover bid last year in an attempt to block another major K-pop agency, Hybe, from acquiring it.
SM Entertainment and Hybe are among the leading K-pop companies in South Korea, representing popular groups like Aespa and BTS.
Kakao ultimately secured the acquisition of SM Entertainment. Last year, Kakao’s chief investment officer was also indicted on similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao is partially owned by Kim, who held approximately a 24% stake in the company. Kakao employed over 10,000 people in 2020, and 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 fell by 5%. A professor from Korea University Business School noted that this situation could represent Kakao’s “biggest crisis,” emphasizing that it would be essential for remaining leadership to demonstrate the company’s resilience in Kim’s absence.