A South Korean billionaire and technology entrepreneur has been arrested on charges of allegedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the tech firm Kakao, has not yet been formally charged. An arrest warrant has been issued by the Seoul Southern District Court as prosecutors expressed concerns that he might flee the country or tamper with evidence.
Kim stated, “The allegations are not true. I have never instructed or condoned any illegal acts,” during a recent staff meeting at Kakao. The company labeled the arrest as “unfortunate.”
At 58 years old, Kim is accused of influencing the stock of SM Entertainment during a takeover bid last year to thwart a competing acquisition by Hybe, another leading K-pop agency.
SM Entertainment and Hybe represent major K-pop acts, including Aespa and BTS, respectively. Kakao eventually acquired SM Entertainment, and last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted for stock manipulation.
Kim founded Kakao in 2010, with its headquarters in Jeju City. He holds approximately a 24% stake in the company, which employed over 10,000 people in 2020. At one time, he was recognized as South Korea’s richest individual, with a net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock prices dipped by 5%. Woochan Kim, a professor at Korea University Business School, indicated that this might represent Kakao’s “biggest crisis,” emphasizing the importance for the remaining leadership to maintain the company’s stability in the founder’s absence.