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 the tech firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him due to concerns that he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” His company described the arrest as “unfortunate.”
The 58-year-old businessman is accused of manipulating the stock of SM Entertainment during a takeover last year in an effort to thwart Hybe, another leading K-pop agency, from acquiring it.
SM Entertainment and Hybe are two of the largest K-Pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Kakao eventually took control of SM Entertainment. Last year, Kakao’s chief investment officer Bae Jae-hyun faced similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao, in which Kim holds approximately a 24% stake, employed over 10,000 people as of 2020. At one point, Kim was the richest person in South Korea, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, suggested that this could be Kakao’s “biggest crisis,” emphasizing the need for those remaining at the company to demonstrate its stability in Kim’s absence.