A South Korean billionaire and technology entrepreneur was taken into custody 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 Kakao Corporation, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for his detention due to concerns that he might flee the country or destroy evidence.
Kim has denied the allegations, stating in a staff meeting at Kakao that he has never directed or condoned any illegal actions. The company expressed disappointment over the arrest, calling it “unfortunate.”
The 58-year-old is accused of influencing the stock of SM Entertainment during a takeover attempt last year, aiming to thwart another major K-pop agency, Hybe, from acquiring it. SM Entertainment and Hybe are among the leading K-pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Kakao successfully acquired SM Entertainment, and last year, Kakao’s chief investment officer, Bae Jae-hyun, faced similar stock manipulation charges.
Founded in 2010 and headquartered in Jeju City, Kakao had more than 10,000 employees by 2020, with Kim holding approximately 24% of the company’s shares. He was previously listed as South Korea’s richest individual, boasting an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock saw a decline of 5% on Tuesday. A professor at Korea University Business School mentioned that this could be one of Kakao’s “biggest crises,” emphasizing that the remaining leaders at the company will need to demonstrate effective management in Kim’s absence.