A South Korean billionaire and tech mogul, Kim Beom-su, was arrested on Tuesday following allegations of stock price manipulation concerning SM Entertainment, a prominent K-pop agency. This situation arose during a takeover effort last year, wherein Kim is accused of trying to thwart rival agency Hybe’s acquisition of SM Entertainment.
While Kim has not been formally charged, the Seoul Southern District Court granted an arrest warrant over concerns he might evade justice or destroy evidence. During a recent meeting at Kakao, the tech firm he founded, Kim vehemently denied the accusations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” In response to his arrest, Kakao described the situation as “unfortunate.”
Kim, who is 58 years old and founded Kakao in 2010, holds approximately a 24% stake in the company. At one point, he was considered South Korea’s richest individual, with a reported net worth exceeding $13 billion. The company acquired SM Entertainment, which represents highly popular K-pop groups including Aespa, while Hybe is known for BTS.
Following the news of Kim’s arrest, Kakao’s stock price dropped by 5%. Experts suggest that this could be a significant challenge for the company. Woochan Kim, a professor at Korea University Business School, commented on the gravity of the situation, indicating that it’s now the responsibility of Kakao’s remaining leadership to ensure the company’s stability in Kim’s absence.
This incident serves as a reminder of the high stakes involved in the fast-paced world of K-pop and the tech industry, emphasizing the need for transparency and ethical integrity in business practices. It also presents a pivotal opportunity for Kakao’s leadership to prove resilience and adaptability during a challenging time. The ongoing developments will be crucial not only for the company’s future but also for the larger South Korean business landscape.