A South Korean billionaire and technology entrepreneur has been arrested on allegations of manipulating the stock price of a major K-pop agency during a transaction from the previous 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 amid concerns that he might flee the country or destroy evidence.
In a staff meeting last week, Kim denied the allegations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
The 58-year-old business leader is believed to have manipulated the stock of SM Entertainment during a takeover bid last year, reportedly to thwart rival company Hybe, a significant player in the K-pop industry.
Both SM Entertainment and Hybe are prominent K-Pop companies in South Korea, representing popular groups like Aespa and BTS. In the end, Kakao successfully acquired SM Entertainment. Last year, Kakao’s Chief Investment Officer Bae Jae-hyun faced charges connected to stock manipulation.
Founded in 2010 and based in Jeju City, Kakao is a major employer, having employed over 10,000 people as of 2020. At one point, Kim was the wealthiest individual in South Korea, with an estimated net worth surpassing $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, commented that this situation could mark Kakao’s “biggest crisis,” emphasizing the challenge for the company to maintain operations in the founder’s absence.