A South Korean billionaire and technology entrepreneur 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 tech giant Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for his detention, as prosecutors expressed concerns that he might flee the country or destroy evidence.
“The allegations are not true. I have never instructed or condoned any illegal acts,” Kim stated during a staff meeting at Kakao last week. The company described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment in 2022 as part of a strategy to hinder rival Hybe from acquiring it. SM Entertainment and Hybe are two of South Korea’s largest K-Pop companies, representing popular acts such as Aespa and BTS.
Kakao eventually took over SM Entertainment. Additionally, Kakao’s chief investment officer Bae Jae-hyun faced indictment on stock manipulation charges last year.
Kim, who founded Kakao in 2010, holds approximately a 24% stake in the company, which employed over 10,000 people as of 2020. At one point, he was recognized as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, commented that this could represent Kakao’s “biggest crisis,” urging those who remain at the company to demonstrate its ability to operate effectively in the founder’s absence.