A South Korean billionaire and tech leader was apprehended 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 technology firm Kakao, has yet to face any formal charges, according to the New York Times. The Seoul Southern District Court has issued an arrest warrant to secure his detention, as prosecutors are concerned he may flee the country or destroy evidence.
During a staff meeting at Kakao last week, Kim claimed, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company referred to his arrest as “unfortunate.”
The 58-year-old is accused of inflating the stock value of SM Entertainment last year to thwart a takeover attempt by Hybe, another leading K-pop agency.
Both SM Entertainment and Hybe are major players in South Korea’s K-pop industry, representing popular groups Aespa and BTS, respectively.
Kakao eventually took over SM Entertainment. Last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted on charges of stock manipulation.
Kim founded Kakao in 2010, with its headquarters in Jeju City. He held about a 24% stake in the company, which employed over 10,000 individuals in 2020. At one time, he was recognized as South Korea’s richest individual, with a fortune exceeding $13 billion.
Following the news of his arrest, Kakao’s stock price fell by 5%. Woochan Kim, a professor at Korea University Business School, suggested that this could represent Kakao’s “biggest crisis,” emphasizing the importance of the remaining leadership to prove the company can thrive without its founder.