A billionaire South Korean tech mogul has been arrested for allegedly manipulating the stock price of a significant K-pop agency during a deal last year. Kim Beom-su, the founder of the technology company Kakao, has not yet been formally charged. The Seoul Southern District Court issued an arrest warrant amid concerns that he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
The 58-year-old businessman is accused of manipulating SM Entertainment’s stock during a takeover last year to hinder a competing acquisition by Hybe, another leading K-pop agency. SM Entertainment and Hybe represent two of South Korea’s largest K-Pop entities, managing Aespa and BTS respectively.
Kakao ultimately took control of SM Entertainment, but last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted for stock manipulation.
Founded in 2010 and based in Jeju City, Kakao had over 10,000 employees as of 2020, with Kim holding approximately a 24% stake in the firm. At one point, he was the richest person in South Korea, with a net worth estimated at over $13 billion.
Following news of Kim’s arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company can operate successfully without its founder.