A South Korean billionaire and tech entrepreneur was apprehended on Tuesday over allegations of stock manipulation involving a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the technology giant Kakao, has not been formally charged with any crimes, according to reports. The Seoul Southern District Court issued a warrant for his arrest to ensure his presence, as prosecutors expressed concerns that he might flee the country or destroy evidence.
Kim has denied the allegations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts,” during a recent staff meeting at Kakao. 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 rival K-pop agency Hybe’s acquisition efforts. SM Entertainment and Hybe are among South Korea’s largest K-pop companies, managing popular artists like Aespa and BTS.
Kakao successfully acquired SM Entertainment, and last year, the company’s chief investment officer, Bae Jae-hyun, was also indicted for stock manipulation.
Founded in 2010 and headquartered in Jeju City, Kakao counts Kim as a significant shareholder, holding approximately a 24% stake. The company employed over 10,000 people in 2020, and at one point, he was deemed South Korea’s richest individual, with a net worth exceeding $13 billion.
In the wake of Kim’s arrest, Kakao’s stock dropped by 5%. Woochan Kim, a professor at Korea University Business School, commented that this situation might represent Kakao’s “biggest crisis,” emphasizing the need for the remaining management to ensure the company’s stability in Kim’s absence.