A billionaire and technology entrepreneur from South Korea was arrested on Tuesday for allegedly manipulating the stock prices of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the tech giant Kakao, has not yet been formally charged, according to reports. An arrest warrant was issued by the Seoul Southern District Court as prosecutors expressed concerns that he might flee the country or destroy evidence.
Kim asserted his innocence during a recent staff meeting at Kakao, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
The 58-year-old businessman is accused of manipulating the stock of SM Entertainment during a takeover last year to thwart the acquisition efforts of another major K-pop agency, Hybe. SM Entertainment and Hybe are two of the most significant players in the K-Pop industry, representing artists like Aespa and BTS.
Kakao eventually completed the acquisition of SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, was also indicted on charges of stock manipulation.
Founded in 2010 and headquartered in Jeju City, Kakao employs over 10,000 people and Kim owns approximately 24% of the company. He was once recognized as South Korea’s wealthiest individual, with his 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 could represent Kakao’s “biggest crisis” and noted the challenge for remaining company leaders to prove its stability without the founder’s presence.