A South Korean billionaire and tech executive was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a takeover bid last year.
Kim Beom-su, the founder of the technology company Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him amid concerns that he might flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts,” Kim stated during a recent Kakao staff meeting. The company referred to the arrest as “unfortunate.”
At 58 years old, Kim is accused of manipulating the stock of SM Entertainment as part of a strategy to thwart another major K-pop agency, Hybe, from acquiring it.
SM Entertainment and Hybe are two leading names in the K-Pop industry, representing popular groups Aespa and BTS, respectively. Kakao eventually completed the acquisition of SM Entertainment. Additionally, Kakao’s chief investment officer Bae Jae-hyun was indicted last year for similar stock manipulation charges.
Founded in 2010 and headquartered in Jeju City, Kakao employs over 10,000 individuals, and Kim holds approximately a 24% stake in the company. He was once considered South Korea’s wealthiest person, with a net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock declined by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this might represent Kakao’s “biggest crisis” and emphasized the importance of the remaining team demonstrating the company’s viability in Kim’s absence.