A South Korean billionaire and tech entrepreneur was arrested on Tuesday over allegations of manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged. The Seoul Southern District Court issued an arrest warrant for him, citing concerns that he might flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts,” Kim stated during a staff meeting at Kakao last week, referring to the allegations as untrue. The company described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment during a takeover bid last year to thwart a rival, Hybe, from acquiring the company. SM Entertainment and Hybe are two of South Korea’s largest K-pop firms, representing popular groups Aespa and BTS, respectively.
Kakao eventually purchased SM Entertainment, and last year, the company’s chief investment officer Bae Jae-hyun faced indictment on similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao is a major player in the technology sector. Kim, who holds approximately a 24% stake in the company, was once the richest person in South Korea with an estimated net worth exceeding $13 billion. Following the news of his arrest, Kakao’s stock fell by 5%.
Woochan Kim, a professor at Korea University Business School, suggested that this incident could represent “Kakao’s biggest crisis,” emphasizing the importance of demonstrating the company’s stability without its founder.