A South Korean billionaire and technology entrepreneur was apprehended on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the tech firm Kakao, has not yet been officially charged, according to reports. The Seoul Southern District Court has issued an arrest warrant for Kim due to concerns that he might flee the country or destroy evidence.
In a recent staff meeting, Kim stated, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao has described the arrest as “unfortunate.”
The 58-year-old entrepreneur is accused of manipulating the stock of SM Entertainment during a takeover attempt last year, aimed at hindering Hybe, another major K-pop agency, from acquiring it.
SM Entertainment and Hybe are two of South Korea’s leading K-Pop companies, representing popular groups Aespa and BTS, respectively.
Ultimately, Kakao acquired SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on charges related to stock manipulation.
Kim founded Kakao, headquartered in Jeju City, in 2010. He held approximately a 24% stake in the company, which employed over 10,000 individuals in 2020. At one time, he was considered South Korea’s wealthiest individual, with an estimated net worth exceeding $13 billion.
In response to the news of his arrest, Kakao’s stock fell by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis,” emphasizing the need for those remaining in the company to demonstrate its ability to operate successfully without its founder.