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 transaction last year.
Kim Beom-su, the founder of technology firm Kakao, has not yet faced formal charges, according to reports. The Seoul Southern District Court issued an arrest warrant for him amid concerns that he might escape the country or destroy evidence.
Kim has denied the allegations, asserting in a recent staff meeting that he has never authorized or condoned any illegal activities. Kakao described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment during a takeover attempt last year to thwart rival Hybe, another significant player in the K-pop industry.
SM Entertainment and Hybe are two leading K-Pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Ultimately, Kakao secured the acquisition of SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on charges of stock manipulation.
Kim founded Kakao in 2010, with the company based in Jeju City. He held about a 24% stake in Kakao, which employed over 10,000 individuals in 2020. At one point, he was the wealthiest person in South Korea, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock dropped by 5%. A professor at Korea University Business School remarked that this could be Kakao’s “biggest crisis,” emphasizing that it would be crucial for the remaining team to ensure the company’s smooth operation in Kim’s absence.