A prominent South Korean billionaire and tech entrepreneur, Kim Beom-su, was arrested on Tuesday for allegedly manipulating the stock prices of a major K-pop agency during a takeover attempt last year.
The founder of the tech giant Kakao has not yet been formally charged, according to reports from the New York Times. The Seoul Southern District Court has issued an arrest warrant for Kim, expressing concerns that he might flee the country or destroy evidence related to the case.
In a recent staff meeting, Kim denied the allegations, asserting, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao labeled his arrest as “unfortunate.”
Kim, aged 58, faces accusations of tampering with the stock of SM Entertainment to hinder Hybe, another leading K-pop company, from taking over. SM Entertainment and Hybe are among the largest K-pop entities in South Korea, associated with popular groups Aespa and BTS, respectively.
Ultimately, Kakao succeeded in acquiring SM Entertainment despite the issues raised. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on charges of stock manipulation.
Founded in 2010 in Jeju City, Kakao is a significant player in the tech industry, with Kim holding about a 24% stake in the company, which employed over 10,000 people in 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 experienced a 5% decline. Woochan Kim, a professor at Korea University Business School, commented that this could be Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to ensure the company’s stability in Kim’s absence.