A South Korean billionaire and technology entrepreneur was detained 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 been officially charged. A Seoul Southern District Court has issued an arrest warrant, with prosecutors expressing concerns that he may attempt to flee the country or destroy evidence.
Kim, 58, asserted his innocence during a recent staff meeting at Kakao, 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 tampering with the stock of SM Entertainment in order to thwart Hybe, another leading K-pop agency, from securing the acquisition. Both SM Entertainment and Hybe are among the largest K-pop companies in South Korea, representing popular acts like Aespa and BTS.
Kakao ultimately acquired SM Entertainment last year. Previously, Kakao’s chief investment officer, Bae Jae-hyun, was indicted on stock manipulation charges as well.
Kim founded Kakao in 2010 and holds approximately a 24% stake in the company, which employed over 10,000 people in 2020. He was once the wealthiest person in South Korea, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock dropped by 5%. Woochan Kim, a professor at Korea University Business School, commented that this situation could represent Kakao’s “biggest crisis.” He emphasized that it would now be the responsibility of remaining company executives to demonstrate that the business can operate effectively in Kim’s absence.