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 takeover deal last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged, according to the New York Times. The Seoul Southern District Court issued an arrest warrant, expressing concerns that he might flee the country or destroy evidence.
Kim asserted his innocence in a staff meeting at Kakao, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Following his arrest, the company described the situation as “unfortunate.”
The 58-year-old is accused of manipulating shares of SM Entertainment during a takeover attempt to thwart rival K-pop agency Hybe from acquiring the company.
SM Entertainment and Hybe rank among South Korea’s largest K-Pop firms, representing the groups Aespa and BTS, respectively. Kakao eventually took over SM Entertainment, and last year, Bae Jae-hyun, Kakao’s chief investment officer, was also indicted on charges of stock manipulation.
Kim founded Kakao in Jeju City in 2010, and as of 2020, the firm employed over 10,000 people with Kim holding approximately a 24% stake. At one point, he was South Korea’s wealthiest individual, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock saw a decline of 5% on Tuesday. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to prove the company’s viability without its founder.