A South Korean billionaire and technology entrepreneur was apprehended on Tuesday for reportedly manipulating the stock price of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him amid concerns that he could flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts. The allegations are not true,” Kim stated during a company meeting at Kakao last week. The organization described his arrest as “unfortunate.”
The 58-year-old is accused of engaging in stock manipulation involving SM Entertainment during a takeover bid last year to obstruct rival K-pop agency Hybe from acquiring it.
SM Entertainment and Hybe are among the largest K-pop companies in the country, representing famous groups such as Aespa and BTS.
Kakao ultimately acquired SM Entertainment, and last year, the company’s chief investment officer, Bae Jae-hyun, was also indicted on charges related to stock manipulation.
Founded by Kim in 2010, Kakao is based in Jeju City and employed more than 10,000 people as of 2020. At one time, Kim was recognized as South Korea’s richest individual, with an estimated net worth exceeding $13 billion.
Following the announcement of his arrest, Kakao’s stock price fell by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, suggested that this incident could represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company’s ability to operate smoothly without its founder.