A South Korean billionaire and tech 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 technology company Kakao, has not yet been formally charged. The Seoul Southern District Court issued an arrest warrant for him, citing concerns that he might try to leave the country or destroy evidence.
“The allegations are not true. I have never instructed or condoned any illegal acts,” Kim reportedly stated in a staff meeting at Kakao prior to his arrest, which the company described as “unfortunate.”
Kim, who is 58 years old, is accused of manipulating the stock of SM Entertainment during a takeover bid last year to thwart Hybe, another major K-pop agency, from acquiring it. SM Entertainment and Hybe are among the largest K-Pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Kakao completed the acquisition of SM Entertainment, and last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted on charges of stock manipulation.
Founded by Kim in 2010 and headquartered in Jeju City, Kakao has grown significantly, employing over 10,000 people as of 2020. Kim was once recognized as South Korea’s richest individual, with an estimated net worth exceeding $13 billion.
In response to the news of his arrest, Kakao’s stock fell by 5% on Tuesday. Woochan Kim, a professor at Korea University Business School, mentioned that this situation could represent Kakao’s “biggest crisis.” He emphasized the importance for those remaining at the company to demonstrate that it can continue to operate effectively in the founder’s absence.