A billionaire tech entrepreneur from South Korea, Kim Beom-su, was arrested on Tuesday for purportedly manipulating the stock price of a prominent K-pop agency during last year’s acquisition attempt. Kim, who established the tech firm Kakao, has not yet been formally charged. According to reports, the Seoul Southern District Court authorized the warrant for his arrest due to concerns that he might flee the country or destroy evidence.
In a recent meeting with Kakao staff, Kim refuted the allegations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao expressed its disappointment regarding the arrest.
Kim, aged 58, is accused of orchestrating stock manipulation involving SM Entertainment amid a takeover bid, aimed at thwarting rival K-pop agency Hybe’s attempt to purchase the company. Both SM Entertainment and Hybe are leading entities in South Korea’s K-pop industry, representing popular groups Aespa and BTS, respectively.
Kakao successfully acquired SM Entertainment, and last year, the company’s chief investment officer, Bae Jae-hyun, faced similar stock manipulation charges.
Founded in 2010 and headquartered in Jeju City, Kakao was once led by Kim, who held a 24% stake in the firm. By 2020, it employed over 10,000 individuals and had elevated Kim to the status of South Korea’s wealthiest individual, with an estimated fortune exceeding $13 billion.
Following the announcement of Kim’s arrest, Kakao’s stock price fell by 5%. Business professor Woochan Kim from Korea University Business School remarked that this incident could represent Kakao’s “biggest crisis,” adding that it is crucial for the remaining leadership to demonstrate the company’s capability to operate effectively without its founder.