A South Korean billionaire and technology leader was taken into custody 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 the tech firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court authorized an arrest warrant amid concerns from prosecutors that he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim denied the allegations, asserting, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
The 58-year-old entrepreneur is accused of influencing the stock of SM Entertainment during a takeover bid last year to thwart Hybe, another major K-pop agency, from acquiring it.
SM Entertainment and Hybe are among South Korea’s leading K-pop firms, representing popular groups Aespa and BTS respectively.
Kakao successfully acquired SM Entertainment, but last year, Kakao’s chief investment officer Bae Jae-hyun faced similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao is a major player in the tech industry, employing over 10,000 individuals in 2020. Kim was once regarded as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the announcement of his arrest, Kakao’s stock plummeted by 5%.
Woochan Kim, a professor at Korea University Business School, commented that this could represent Kakao’s most significant crisis. He emphasized that it is now up to the remaining leadership to prove the company can succeed even in the absence of its founder.