A South Korean billionaire and tech entrepreneur was arrested on Tuesday for alleged stock manipulation involving a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the tech firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court authorized his arrest due to concerns that he might flee the country or destroy evidence related to the case.
“I have never instructed or condoned any illegal acts,” Kim stated during a staff meeting at Kakao last week. The company described his arrest as “unfortunate.”
The allegations suggest that Kim manipulated stock prices of SM Entertainment during a takeover bid last year to thwart rival K-pop agency Hybe from acquiring the company. SM Entertainment and Hybe are among South Korea’s leading K-pop firms, representing popular acts such as Aespa and BTS.
Kakao eventually succeeded in acquiring SM Entertainment, and last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted for similar stock manipulation offenses.
Founded in 2010 and based in Jeju City, Kakao employs over 10,000 people and Kim holds a roughly 24% stake in the company. He was previously recognized as South Korea’s wealthiest individual, with a 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, indicated that this might represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company’s stability in Kim’s absence.