A South Korean billionaire and tech entrepreneur was taken into custody on Tuesday for allegedly manipulating the stock prices of a leading K-pop agency during a major acquisition deal last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court has issued an arrest warrant to ensure his detention due to concerns that he might flee the country or destroy evidence.
In a recent 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 event as “unfortunate.”
The 58-year-old businessman is accused of interfering with the stock of SM Entertainment during a takeover bid to thwart rival agency Hybe, which sought to acquire it. SM Entertainment and Hybe are two of the largest K-pop companies in South Korea, well-known for representing popular groups such as Aespa and BTS.
Kakao eventually secured the acquisition of SM Entertainment. Additionally, last year, Kakao’s chief investment officer Bae Jae-hyun was indicted on related stock manipulation charges.
Kim founded Kakao in 2010 in Jeju City and retains about a 24% ownership stake in the firm, which had over 10,000 employees by 2020. At one time, he was considered the richest individual in South Korea, 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, remarked that this could represent Kakao’s “biggest crisis,” emphasizing the need for remaining executives to demonstrate effective management in Kim’s absence.