A South Korean billionaire and prominent tech figure was arrested on Tuesday for allegedly influencing the stock price of a leading K-pop agency during a transaction last year.
Kim Beom-su, the founder of Kakao, has not yet faced formal charges, according to reports. The Seoul Southern District Court granted an arrest warrant due to concerns that he might flee the country or destroy evidence.
Kim denied the allegations, stating, “I have never instructed or condoned any illegal acts,” during a recent staff meeting at Kakao. The company expressed that the arrest was “unfortunate.”
The 58-year-old is accused of manipulating shares of SM Entertainment amid a takeover attempt last year to thwart Hybe, another major K-pop agency, from acquiring the company.
SM Entertainment and Hybe are two of South Korea’s leading K-Pop enterprises, representing the girl group Aespa and boy band BTS, respectively.
Kakao ultimately completed the acquisition of SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, was also indicted on charges of stock manipulation.
Kim launched Kakao in 2010 in Jeju City, where he retains about a 24% ownership. The company had over 10,000 employees as of 2020. At one point, Kim was the richest individual in South Korea, with a net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock fell by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, remarked that this incident could represent Kakao’s “biggest crisis.” He noted, “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.”