A South Korean billionaire and technology entrepreneur was apprehended on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the tech giant Kakao, has not yet been formally charged. The Seoul Southern District Court issued an arrest warrant for him, concerned that he might flee the country or destroy evidence.
Kim stated at a recent staff meeting that the allegations against him are false, insisting he has never engaged in or tolerated any illegal actions. Kakao deemed the arrest “unfortunate.”
The 58-year-old businessman is accused of meddling with the stock of SM Entertainment during a takeover attempt last year, allegedly to thwart another major K-pop agency, Hybe, from acquiring it. SM Entertainment and Hybe are two of South Korea’s leading K-pop companies, representing popular groups Aespa and BTS, respectively.
Kakao ultimately succeeded in purchasing SM Entertainment. Last year, Kakao’s chief investment officer Bae Jae-hyun was also charged with stock manipulation.
Kim launched Kakao in 2010 and has maintained roughly a 24% ownership stake. The firm employed over 10,000 individuals in 2020, and at one point, he held the title of South Korea’s richest person, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock dipped by 5%. An academic from Korea University Business School indicated that this could mark Kakao’s most significant crisis yet, stressing the importance for remaining executives to demonstrate the company’s resilience without its founder.