A South Korean billionaire and tech entrepreneur has been arrested 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 technology firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him due to concerns that he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim stated, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
At 58 years old, Kim faces accusations of influencing the stock of SM Entertainment during a takeover bid last year as part of an effort to thwart another major K-pop agency, Hybe, from acquiring it.
SM Entertainment and Hybe are among the largest K-Pop companies in South Korea, representing popular groups such as Aespa and BTS. Kakao ultimately succeeded in acquiring SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted for stock manipulation.
Founded in 2010 and based in Jeju City, Kakao is a significant player in the tech industry, with Kim holding around a 24% stake in the company. At one point, he was regarded as South Korea’s wealthiest individual, boasting an estimated net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock saw a 5% decline on Tuesday.
Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis.” He emphasized that it would be crucial for the remaining leadership to demonstrate the company’s ability to thrive in the absence of its founder.