A South Korean billionaire and tech entrepreneur has been arrested on allegations of manipulating the stock price of a prominent K-pop agency during a takeover last year.
Kim Beom-su, the founder of technology giant Kakao, has not been formally charged, according to reports. The Seoul Southern District Court has issued an arrest warrant, with prosecutors expressing concerns that he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim stated, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
The 58-year-old is accused of influencing the stock of SM Entertainment amid an attempted takeover to thwart Hybe, another leading K-pop company. Both SM Entertainment and Hybe are major players in the K-pop industry, representing popular groups Aespa and BTS respectively.
Kakao eventually acquired SM Entertainment, and last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted for stock manipulation.
Kim started Kakao in 2010, and he held a 24% stake in the company, which employed over 10,000 people in 2020. He was previously considered South Korea’s wealthiest individual, with an estimated net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock dropped by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis,” emphasizing that it will be up to those remaining at the company to demonstrate its capability to thrive without its founder.