A South Korean billionaire and technology entrepreneur was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged, according to reports. An arrest warrant was issued by the Seoul Southern District Court to ensure his presence, as prosecutors expressed concerns that he might flee the country or destroy evidence.
Kim, 58, stated during a staff meeting at Kakao last week, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
He is accused of manipulating the stock of SM Entertainment during a takeover bid last year to hinder Hybe, another major K-pop agency, from acquiring it. SM Entertainment and Hybe are among South Korea’s largest K-Pop companies, representing popular acts such as Aespa and BTS.
Kakao eventually purchased SM Entertainment. Additionally, Kakao’s chief investment officer, Bae Jae-hyun, was indicted on similar stock manipulation charges last year.
Founded in 2010 and headquartered in Jeju City, Kakao employs over 10,000 people, and Kim is estimated to own approximately 24% of the company. At one point, he was considered South Korea’s richest individual, with a net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock dropped by 5% on Tuesday. A professor at Korea University Business School suggested that this incident might represent Kakao’s most significant crisis, stating, “It would be the job of those who remain at the company to show that it can run well even with the founder not around.”