A prominent South Korean billionaire and technology executive was arrested on Tuesday for allegedly manipulating the stock price of a major K-pop agency during a takeover attempt last year.
Kim Beom-su, the founder of the tech company Kakao, has not yet been formally charged with any crimes, according to reports. The Seoul Southern District Court authorized his arrest amid concerns from prosecutors that he might flee the country or destroy evidence related to the case.
Kim has publicly denied the allegations, asserting in a recent staff meeting at Kakao that he has never directed or supported any illegal activities. The company described the arrest as “unfortunate.”
The 58-year-old is suspected of intervening in the stock of SM Entertainment in order to thwart a takeover by Hybe, another major player in the K-pop industry. SM Entertainment and Hybe are two of South Korea’s leading K-pop firms, with Aespa and BTS among their representative groups.
Kakao eventually acquired SM Entertainment, while the company’s chief investment officer, Bae Jae-hyun, was indicted last year on similar stock manipulation charges.
Founded in 2010 and headquartered in Jeju City, Kakao reported having more than 10,000 employees in 2020. At one point, Kim was the wealthiest individual in South Korea, boasting an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock price fell by 5%. According to Woochan Kim, a professor at Korea University Business School, this situation could represent Kakao’s most significant crisis to date. He emphasized the importance of the remaining company leaders demonstrating that operations can continue effectively in Kim’s absence.