A billionaire tech entrepreneur from South Korea was detained on Tuesday for purportedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of tech giant Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court authorized an arrest warrant out of concern that he might flee the country or destroy evidence related to the case.
“I deny the allegations. I have never instructed or permitted any illegal actions,” Kim stated at a recent meeting with Kakao staff. The company described his arrest as “unfortunate.”
At 58 years old, Kim is accused of influencing the stock of SM Entertainment during an acquisition attempt last year to thwart a rival, Hybe, from acquiring the company.
SM Entertainment and Hybe are among South Korea’s leading K-Pop firms, with Aespa and BTS respectively under their management.
Kakao ultimately succeeded in acquiring SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also implicated in stock manipulation activities.
Kim founded Kakao in 2010, with the company based in Jeju City. He held roughly a 24% stake in the firm, which employed over 10,000 individuals as of 2020. At one point, he was regarded as the wealthiest person in South Korea, with a net worth exceeding $13 billion.
Following the announcement of his arrest, Kakao’s stock fell by 5%.
Woochan Kim, a professor at the Korea University Business School, remarked that this could represent a significant crisis for Kakao.
“It will be up to those remaining at the company to demonstrate that it can operate effectively even in the absence of its founder,” he noted.