A South Korean billionaire and tech entrepreneur has been arrested for allegedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged. The Seoul Southern District Court has issued an arrest warrant, citing concerns that he may flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim denied the allegations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
Kim, 58, is accused of influencing the stock of SM Entertainment during a takeover attempt last year, aiming to thwart competition from Hybe, another leading K-pop agency.
SM Entertainment and Hybe are two of South Korea’s largest K-Pop organizations, managing popular groups like Aespa and BTS.
Kakao eventually purchased SM Entertainment, and last year, the company’s chief investment officer, Bae Jae-hyun, was also indicted on related stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao is a significant player in the tech industry, with Kim owning approximately 24% of the company. In 2020, Kakao employed over 10,000 individuals, and Kim was once South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, noted that this could mark Kakao’s “biggest crisis,” emphasizing that it will be crucial for the remaining leadership to ensure the company operates effectively in Kim’s absence.