A South Korean billionaire and tech entrepreneur was arrested 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 technology firm Kakao, has yet to face formal charges, according to the New York Times. The Seoul Southern District Court has issued an arrest warrant, citing concerns that Kim might flee the country or destroy evidence.
Kim denied the allegations during a recent staff meeting at Kakao, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
At 58 years old, Kim is accused of manipulating SM Entertainment’s stock during a takeover bid last year to obstruct another major K-pop agency, Hybe, from acquiring it. SM Entertainment and Hybe represent two of the largest K-pop companies in the country, associated with popular groups Aespa and BTS, respectively.
Kakao eventually acquired SM Entertainment. Last year, the chief investment officer of Kakao, Bae Jae-hyun, was also indicted on charges of stock manipulation.
Kim founded Kakao in 2010, with its headquarters in Jeju City. He owns approximately a 24% stake in the company, which employed over 10,000 individuals in 2020. Once regarded as South Korea’s richest individual, he has an estimated net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock declined by 5% on Tuesday. Woochan Kim, a professor at Korea University Business School, remarked that this incident could be Kakao’s “biggest crisis,” emphasizing the need for remaining leadership to demonstrate the company can operate effectively without its founder.