A South Korean billionaire and tech mogul was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a deal 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 his detention amid concerns from prosecutors that he might flee the country or destroy evidence.
In a staff meeting at Kakao, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
The 58-year-old entrepreneur is accused of manipulating the stock of SM Entertainment during a takeover attempt last year, aiming to block rival agency Hybe from acquiring it.
SM Entertainment and Hybe are two of the largest K-Pop companies in South Korea, representing popular groups such as Aespa and BTS.
Kakao eventually acquired SM Entertainment. Previously, last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted on similar stock manipulation charges.
Founded in 2010 and headquartered in Jeju City, Kakao is a major player in the tech industry, with Kim holding approximately a 24% stake. The company reportedly employed over 10,000 people in 2020, and Kim was once recognized as South Korea’s richest individual, with a net worth exceeding $13 billion.
Following the announcement of Kim’s arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, commented that this could represent Kakao’s “biggest crisis,” emphasizing that it is now up to the remaining leadership to demonstrate the company can operate effectively without its founder.