A billionaire South Korean tech executive was arrested on Tuesday for allegedly manipulating the stock market of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the technology giant Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him, citing concerns from prosecutors about the possibility of him fleeing the country or destroying evidence.
“I have never instructed or condoned any illegal acts. The allegations are not true,” Kim stated during a recent staff meeting at Kakao. The company described the arrest as “unfortunate.”
The 58-year-old is accused of interfering with the stock of SM Entertainment during a takeover bid last year, allegedly to thwart another major K-pop firm, Hybe, from acquiring the company.
SM Entertainment and Hybe are among the largest K-pop entities in South Korea, representing well-known groups such as Aespa and BTS, respectively.
Kakao eventually completed the acquisition of SM Entertainment, and last year, the firm’s chief investment officer, Bae Jae-hyun, was also indicted on charges related to stock manipulation.
Founded in 2010 and based in Jeju City, Kakao had over 10,000 employees as of 2020, with Kim holding about a 24% stake in the company. He was once the richest person in South Korea, with an estimated net worth exceeding $13 billion.
Following news of his arrest, shares of Kakao dropped by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, remarked that this situation could pose “the biggest crisis” for Kakao. “It would be the job of those who remain at the company to show that it can run well even with the founder not around,” he added.