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 Kakao, has not yet been formally charged, as reported by the New York Times. The Seoul Southern District Court issued an arrest warrant for him, citing concerns that 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.” The company labeled the arrest as “unfortunate.”
At 58 years old, Kim is accused of influencing the stock of SM Entertainment during a takeover attempt last year to thwart another major K-pop agency, Hybe, from acquiring it.
SM Entertainment and Hybe are two of South Korea’s leading K-pop companies, representing popular groups Aespa and BTS, respectively.
Kakao ultimately completed the acquisition of SM Entertainment. Last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted for charges related to stock manipulation.
Kim founded Kakao in 2010, with the company headquartered in Jeju City. He held approximately a 24% stake in the firm, which employed over 10,000 people in 2020. Kim was once considered the richest person in South Korea, with an estimated 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, remarked that this could be Kakao’s “biggest crisis,” emphasizing that it is now up to the remaining leadership to demonstrate that the company can thrive without its founder.