A billionaire and tech entrepreneur from South Korea was taken into custody on Tuesday for allegedly engaging in stock price manipulation involving a prominent K-pop agency during a business deal last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court authorized his arrest due to concerns that he might flee the country or tamper with evidence.
“I have never instructed or condoned any illegal acts. The allegations are not true,” Kim stated during a recent staff meeting at Kakao. The company described the arrest as “unfortunate.”
At 58 years old, Kim faces accusations of influencing the stock price of SM Entertainment during a takeover attempt last year, allegedly to thwart the acquisition efforts of Hybe, another leading K-pop agency.
SM Entertainment and Hybe are significant players in the South Korean K-pop industry, representing popular groups like Aespa and BTS.
Kakao eventually succeeded in acquiring SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, was also indicted on charges of stock manipulation.
Founded in 2010 and based in Jeju City, Kakao is a major employer, having employed over 10,000 people by 2020. Kim has previously been recognized as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the announcement of his arrest, Kakao’s stock price fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this situation could represent “Kakao’s biggest crisis,” emphasizing the importance for the remaining leadership to demonstrate the company’s stability in Kim’s absence.