A billionaire South Korean technology executive was arrested 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 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 destroy evidence.
“I have never instructed or condoned any illegal acts,” Kim stated during a recent meeting at Kakao, emphasizing his innocence. Kakao described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment during a takeover to hinder Hybe, another leading K-pop agency, from acquiring it. SM Entertainment and Hybe are among the top K-pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Kakao eventually completed the acquisition of SM Entertainment. Last year, Bae Jae-hyun, the chief investment officer of Kakao, faced indictment on similar stock manipulation charges.
Kim founded Kakao in 2010, and he held approximately a 24% stake in the company, which employed over 10,000 people as of 2020. He was previously regarded as South Korea’s richest individual, with a net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock dropped by 5%. A professor at Korea University Business School remarked that this situation could represent Kakao’s “biggest crisis,” stressing the importance of the remaining leadership demonstrating the company’s stability in Kim’s absence.