A South Korean billionaire and tech entrepreneur has been detained on charges of allegedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged. A Seoul Southern District Court has issued an arrest warrant for him, as prosecutors are concerned he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim denied the allegations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
The 58-year-old is accused of interfering with the stock of SM Entertainment last year during a takeover bid to thwart rival K-pop agency Hybe’s acquisition efforts.
Both SM Entertainment and Hybe are leading figures in South Korea’s K-pop industry, representing popular acts like Aespa and BTS.
Ultimately, Kakao succeeded in acquiring SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on stock manipulation charges.
Kim founded Kakao in 2010, with its headquarters in Jeju City. He retains approximately a 24% ownership 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 an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock price fell by 5%. Woochan Kim, a professor at Korea University Business School, commented that this could be Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company can operate effectively in the absence of its founder.