A South Korean billionaire and tech entrepreneur was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of technology firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court granted an arrest warrant over concerns that he might flee the country or destroy evidence.
“I did not instruct or approve any illegal activities,” Kim stated during a recent staff meeting at Kakao, adding that the allegations are false. The company described the arrest as “unfortunate.”
The 58-year-old entrepreneur is accused of interfering with the stock of SM Entertainment amid a takeover attempt last year, allegedly aiming to thwart Hybe, another leading K-pop agency, from acquiring the company.
SM Entertainment and Hybe are two of South Korea’s largest K-pop businesses, representing popular groups Aespa and BTS, respectively.
Kakao eventually completed the acquisition of SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, faced similar stock manipulation accusations.
Kim founded Kakao, based in Jeju City, in 2010. He holds approximately a 24% stake in the company, which employed over 10,000 people as of 2020. At one time, Kim was recognized as South Korea’s wealthiest individual, with a net worth estimated at over $13 billion.
Following news of his arrest, Kakao’s stock dipped by 5%. A professor at Korea University Business School commented that this situation could represent Kakao’s “biggest crisis,” suggesting the remaining leadership must demonstrate the company’s stability in the founder’s absence.