A South Korean billionaire and tech executive was taken into custody on Tuesday for allegedly manipulating the stock price of a leading 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. An arrest warrant was issued by the Seoul Southern District Court amid concerns that he might flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts. The allegations are not true,” Kim stated during a staff meeting at Kakao last week, with the company describing the situation as “unfortunate.”
The 58-year-old businessman is accused of influencing the stock of SM Entertainment while attempting to prevent Hybe, another prominent K-pop agency, from acquiring it. SM Entertainment and Hybe are among the largest K-pop firms in South Korea, representing popular groups like Aespa and BTS.
Kakao ultimately completed its acquisition of SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, was also indicted for stock manipulation.
Kim founded Kakao in 2010, and by 2020, the company had over 10,000 employees. He was once the wealthiest individual in South Korea, with a net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis,” emphasizing that the remaining leadership must demonstrate the company’s resilience in the founder’s absence.