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 firm Kakao, has not been officially charged, according to reports. The Seoul Southern District Court issued a warrant for his arrest amid concerns that he might flee the country or destroy evidence.
“The allegations are not true. I have never instructed or condoned any illegal acts,” Kim stated during a staff meeting at Kakao last week. The company described the arrest as “unfortunate.”
At 58 years old, Kim is accused of influencing the stock of SM Entertainment during a takeover attempt last year to thwart Hybe, another leading K-pop agency, from acquiring it. Both SM Entertainment and Hybe are among the largest K-Pop companies in South Korea, representing groups such as Aespa and BTS.
Kakao eventually completed its acquisition of SM Entertainment. Last year, the company’s chief investment officer, Bae Jae-hyun, was also indicted on charges related to stock manipulation.
Founded in 2010 and based in Jeju City, Kakao, in which Kim holds a roughly 24% stake, employed over 10,000 staff members by 2020. At one point, Kim was regarded as South Korea’s richest individual, with an estimated net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock dropped by 5%. Professor Woochan Kim from Korea University Business School suggested that this incident could represent Kakao’s “biggest crisis,” emphasizing the importance for those remaining at the company to demonstrate its capability to operate effectively despite the absence of its founder.