A prominent South Korean billionaire and tech entrepreneur was taken into custody on Tuesday under suspicion of stock price manipulation involving a leading K-pop agency during a deal last year.
Kim Beom-su, the founder of Kakao, has not yet faced formal charges. The Seoul Southern District Court authorized an arrest warrant for him, citing concerns that he might flee the country or destroy evidence.
Kim asserted his innocence during a staff meeting at Kakao last week, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
The 58-year-old businessman is accused of influencing the stock of SM Entertainment in a bid to thwart rival K-pop agency Hybe’s acquisition efforts.
Both SM Entertainment and Hybe are among the largest K-Pop companies in South Korea, representing notable groups such as Aespa and BTS. Kakao eventually secured a deal to acquire SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao, in which Kim holds approximately 24% ownership, employed over 10,000 individuals as of 2020. At one point, Kim was recognized as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5%. Business expert Woochan Kim from Korea University Business School remarked that this could be Kakao’s “biggest crisis,” emphasizing the importance for the remaining company leaders to prove its resilience in Kim’s absence.