A South Korean tech billionaire 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 technology firm Kakao, has not yet been formally charged. The Seoul Southern District Court issued an arrest warrant for him amid concerns that he might flee the country or destroy evidence, as reported by the New York Times.
“The allegations are not true. I have never instructed or condoned any illegal acts,” Kim stated during a recent staff meeting at Kakao. The company referred to the arrest as “unfortunate.”
The 58-year-old is accused of manipulating stock in SM Entertainment during a takeover last year, reportedly to thwart rival K-pop agency Hybe from acquiring the company.
SM Entertainment and Hybe are among the leading K-pop firms in South Korea, representing popular groups such as Aespa and BTS.
Kakao eventually bought SM Entertainment, and last year, Bae Jae-hyun, the chief investment officer of Kakao, was also indicted for stock manipulation.
Founded in 2010 and based in Jeju City, Kakao saw its founder maintain approximately a 24% ownership stake, employing over 10,000 people in 2020. At one point, Kim was recognized as South Korea’s richest person with an estimated net worth exceeding $13 billion.
Following the announcement of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis,” emphasizing the need for the remaining team to demonstrate that the company can thrive without its founder.