A South Korean billionaire and technology entrepreneur was taken into custody on Tuesday over allegations of stock price manipulation involving a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of Kakao, has not been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant to ensure his presence, as prosecutors feared he might flee the country or tamper with evidence.
“I have never instructed or condoned any illegal acts,” Kim stated in a recent meeting at Kakao, calling the allegations untrue. The company has described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment during a takeover bid last year to thwart Hybe, another leading K-pop agency, from acquiring it. SM Entertainment and Hybe are two of South Korea’s largest K-pop firms, representing groups such as Aespa and BTS.
Kakao ultimately secured the acquisition of SM Entertainment, and last year, Kakao’s chief investment officer Bae Jae-hyun faced similar charges of stock manipulation.
Founded in 2010 and based in Jeju City, Kim’s company holds a significant stake of about 24% in Kakao, which employed over 10,000 individuals in 2020. At one point, he was recognized as South Korea’s richest person, with a net worth exceeding $13 billion.
In response to the arrest, Kakao’s stock fell by 5% on Tuesday. A business professor noted that this may represent Kakao’s most significant crisis, emphasizing that it is now up to the remaining leadership to ensure the company continues to operate effectively in Kim’s absence.