A South Korean billionaire and tech entrepreneur 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 technology firm Kakao, has not yet been formally charged. An arrest warrant was issued by the Seoul Southern District Court over concerns that he might flee the country or destroy evidence.
“The allegations are not true. I have never instructed or condoned any illegal acts,” Kim stated during a company meeting at Kakao last week. The company labeled the arrest as “unfortunate.”
At 58, Kim is accused of influencing the stock prices of SM Entertainment amid a takeover attempt last year, aimed at thwarting rival K-pop agency Hybe from acquiring it.
SM Entertainment and Hybe are among South Korea’s largest K-Pop firms, representing popular groups Aespa and BTS, respectively. Ultimately, Kakao acquired SM Entertainment, and last year, Kakao’s chief investment officer Bae Jae-hyun faced indictment on similar stock manipulation charges.
Founded in 2010 and headquartered in Jeju City, Kakao saw Kim retain around a 24% ownership stake. The company employed over 10,000 individuals by 2020. Kim was once recognized as South Korea’s wealthiest individual, boasting a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock price fell by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, remarked that this situation could represent Kakao’s “biggest crisis.” He added, “It would be the job of those who remain at the company to demonstrate that it can operate effectively even without the founder.”