A South Korean billionaire and tech entrepreneur was taken into custody on Tuesday for allegedly manipulating the stock value of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the tech firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him over concerns that he might flee the country or destroy evidence.
During a company meeting last week, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
At 58 years old, Kim is accused of engaging in stock manipulation involving SM Entertainment in order to thwart Hybe, another leading K-pop agency, from acquiring it.
SM Entertainment and Hybe are among South Korea’s largest K-pop companies, representing popular groups such as Aespa and BTS.
Kakao eventually secured the acquisition of SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, faced similar stock manipulation accusations.
Kim established Kakao in 2010, with its headquarters in Jeju City. He held about a 24% stake in the company, which employed over 10,000 individuals as of 2020. At one point, he was recognized as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
In response to 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 could represent Kakao’s “biggest crisis.” He added, “It will be the responsibility of those remaining at the company to demonstrate that it can continue to function effectively without the founder.”