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 deal last year.
Kim Beom-su, the founder of the tech company Kakao, has not yet been officially charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him amid concerns from prosecutors 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 at a recent staff meeting at Kakao. The company described his arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment to thwart a takeover by Hybe, another leading K-pop agency.
SM Entertainment and Hybe are among the largest K-pop companies in South Korea, representing popular groups like Aespa and BTS.
Kakao ultimately completed the acquisition of SM Entertainment. Last year, the company’s chief investment officer, Bae Jae-hyun, was also indicted for stock manipulation.
Founded in 2010 and headquartered in Jeju City, Kakao employs over 10,000 people. At one point, Kim was recognized as South Korea’s richest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, remarked that this situation could represent Kakao’s “biggest crisis.” He emphasized the need for those remaining at the company to demonstrate its capability to operate efficiently without its founder.