A South Korean billionaire and tech entrepreneur has been apprehended for allegedly manipulating the stock prices of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of technology firm Kakao, has not yet been officially charged. The Seoul Southern District Court issued an arrest warrant due to concerns that he may flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim asserted his innocence, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao expressed that the arrest is “unfortunate.”
The 58-year-old is suspected of interfering with the stock of SM Entertainment during a takeover attempt to thwart rival K-pop agency Hybe’s acquisition efforts.
SM Entertainment and Hybe are among South Korea’s leading K-pop companies, representing popular groups Aespa and BTS, respectively. Ultimately, Kakao successfully acquired SM Entertainment, and last year, Kakao’s chief investment officer was also indicted on charges of stock manipulation.
Kim established Kakao in 2010 and holds a 24% stake in the company, which had over 10,000 employees as of 2020. At one time, he was considered South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the announcement of Kim’s arrest, Kakao’s stock dropped by 5%.
A professor at Korea University Business School suggested this incident could represent Kakao’s “biggest crisis,” emphasizing that it falls on current employees to demonstrate that the company can thrive in the absence of its founder.