A South Korean billionaire and tech entrepreneur was apprehended 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 technology company Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant to ensure he would be taken into custody, 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 in a company meeting at Kakao last week. The company described the arrest as “unfortunate.”
The 58-year-old is accused of altering the stock of SM Entertainment during a takeover bid last year, allegedly to hinder rival K-pop agency Hybe from acquiring it.
SM Entertainment and Hybe are two of the largest K-pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Kakao eventually completed the acquisition of SM Entertainment. Additionally, last year, Kakao’s chief investment officer Bae Jae-hyun was indicted on stock manipulation charges.
Kim founded Kakao in 2010, with the company headquartered in Jeju City. He held a 24% stake in the organization, which employed over 10,000 people in 2020. At one time, he was regarded as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this situation could represent Kakao’s “biggest crisis.” He emphasized that it would be up to those remaining at the company to demonstrate that it can continue to function effectively despite the absence of its founder.