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 deal last year.
Kim Beom-su, the founder of technology firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant due to concerns that he may flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts,” Kim stated during a recent staff meeting at Kakao. The company described the arrest as “unfortunate.”
The 58-year-old is accused of altering the stock of SM Entertainment during a takeover last year, allegedly as part of a plan to thwart rival K-pop agency Hybe’s acquisition efforts.
SM Entertainment and Hybe are among the largest K-pop companies in South Korea, representing popular acts Aespa and BTS, respectively. Kakao eventually completed the acquisition of SM Entertainment, and last year, Kakao’s chief investment officer was indicted on similar stock manipulation charges.
Kim founded Kakao in 2010, which is headquartered in Jeju City. As of 2020, the company employed over 10,000 people, and Kim had a stake of approximately 24% in it. At one time, he was recognized as South Korea’s wealthiest person, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5%. A professor from Korea University Business School remarked that this situation could represent Kakao’s “biggest crisis,” indicating that it would be essential for those remaining at the company to demonstrate that operations can continue effectively without its founder.