A South Korean billionaire and tech entrepreneur has been arrested on suspicion of manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of Kakao, was taken into custody after the Seoul Southern District Court issued an arrest warrant amid concerns that he might flee the country or destroy evidence. Although he has not been formally charged, Kim has denied the allegations, stating in a recent staff meeting that he has never engaged in any illegal activities. Kakao has described the arrest as “unfortunate.”
The 58-year-old businessman is accused of stock manipulation related to SM Entertainment while attempting to block rival K-pop agency Hybe from acquiring it. SM Entertainment and Hybe are notable players in the K-pop industry, representing major groups like Aespa and BTS.
Kakao successfully acquired SM Entertainment, but the previous year, Bae Jae-hyun, Kakao’s chief investment officer, was indicted on similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao is a major technology firm in South Korea, with Kim holding approximately a 24% ownership stake. The company employed over 10,000 people as of 2020, and Kim was once recognized as the richest individual in South Korea, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5%. An expert from Korea University Business School commented that this could represent Kakao’s most significant crisis, emphasizing the importance of the remaining leadership to ensure effective company operations in Kim’s absence.