A South Korean billionaire and tech entrepreneur has been arrested for allegedly manipulating the stock price of a prominent K-pop agency during a deal that took place last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant out of concern that he might flee the country or tamper with evidence.
Kim, 58, denied the allegations during a recent meeting with Kakao staff, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
He 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 two of the largest K-pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Kakao eventually acquired SM Entertainment, and last year, the company’s chief investment officer, Bae Jae-hyun, was also indicted on charges of stock manipulation.
Founded in 2010 and headquartered in Jeju City, Kakao, in which Kim holds approximately a 24% stake, employed over 10,000 people as of 2020. At one time, he was the wealthiest individual in South Korea, with an estimated net worth exceeding $13 billion.
In the wake of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis,” emphasizing the importance for remaining leadership to demonstrate the company can thrive in Kim’s absence.