A South Korean billionaire and technology entrepreneur 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 tech giant Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant with concerns that Kim might flee the country or destroy evidence.
Kim has publicly denied the allegations, stating in a recent staff meeting at Kakao, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
At 58, Kim is accused of manipulating the stock of SM Entertainment during a takeover attempt last year, allegedly to thwart another significant K-pop agency, Hybe, from acquiring it.
SM Entertainment and Hybe are among the largest K-pop companies in South Korea, representing popular groups like Aespa and BTS.
Kakao eventually completed the acquisition of SM Entertainment. Additionally, last year, Kakao’s chief investment officer, Bae Jae-hyun, faced indictment on similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao employs over 10,000 people, and Kim holds approximately a 24% stake in the firm. He was once the wealthiest individual in South Korea, with a net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis,” emphasizing the need for remaining leadership to demonstrate that the company can effectively operate in Kim’s absence.