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 tech firm Kakao, has not yet been formally charged. The Seoul Southern District Court has issued an arrest warrant due to concerns that he may leave the country or destroy evidence related to the case.
Kim stated in a recent staff meeting at Kakao, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment during a takeover attempt last year, allegedly to obstruct Hybe, another major K-pop agency, from acquiring it.
Both SM Entertainment and Hybe are among the largest K-pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Kakao eventually acquired SM Entertainment, and last year, the chief investment officer of Kakao, Bae Jae-hyun, was also indicted on stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao, in which Kim holds approximately a 24% stake, had over 10,000 employees by 2020. Kim was previously recognized as South Korea’s richest individual, with an estimated net worth exceeding $13 billion.
Following 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 represent Kakao’s “biggest crisis,” emphasizing the responsibility of those remaining in the company to demonstrate its viability without the founder’s presence.