A South Korean billionaire and tech entrepreneur, Kim Beom-su, was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a deal last year. Kim, who founded the tech giant Kakao, has not yet been formally charged. The Seoul Southern District Court issued an arrest warrant amid concerns that he might flee the country or tamper with evidence.
Kim denied the allegations, stating during a recent staff meeting at Kakao, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
The accusations against Kim pertain to alleged manipulation of SM Entertainment’s stock amid a takeover attempt last year, intended to thwart rival K-pop agency Hybe from acquiring it. Both SM Entertainment and Hybe are major players in the K-pop industry, managing popular groups such as Aespa and BTS, respectively.
Kakao successfully acquired SM Entertainment, but last year, the company’s chief investment officer, Bae Jae-hyun, was also indicted for stock manipulation.
Founded in 2010 and based in Jeju City, Kakao employs over 10,000 people and Kim owns approximately 24% of the company. He was once ranked as South Korea’s richest individual, with a net worth exceeding $13 billion.
Following the announcement of his arrest, Kakao’s stock declined by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this situation might represent Kakao’s most significant crisis yet. He noted that it would now be up to the remaining executives to prove the company’s ability to operate effectively without its founder.