A South Korean billionaire and technology entrepreneur was detained on Tuesday on accusations of manipulating the stock of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the tech firm Kakao, has not yet faced formal charges, according to reports. The Seoul Southern District Court issued an arrest warrant amid concerns that he might flee the country or destroy evidence.
In a staff meeting at Kakao, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
The 58-year-old businessman is alleged to have manipulated the stock of SM Entertainment during its takeover last year to thwart a bid by Hybe, another leading K-pop company.
SM Entertainment and Hybe are among the largest K-pop firms in South Korea, representing artists like Aespa and BTS.
Kakao eventually acquired SM Entertainment. In the previous year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted for stock manipulation.
Founded in 2010 and based in Jeju City, Kakao had over 10,000 employees in 2020, and Kim held around a 24% share in the company. At one time, he was the wealthiest individual in South Korea, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, remarked that this situation could represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leaders at the company to demonstrate its resilience in the founder’s absence.