A South Korean billionaire and tech entrepreneur was arrested 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 the tech company Kakao, has not yet been formally charged. According to reports, the Seoul Southern District Court issued an arrest warrant due to concerns that he might flee the country or destroy evidence.
Kim stated in a recent staff meeting at Kakao that the allegations against him are untrue and he has never endorsed or participated in any illegal activities. Kakao described the arrest as “unfortunate.”
The 58-year-old entrepreneur is accused of manipulating the stock of SM Entertainment during its takeover last year, allegedly 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 top acts such as Aespa and BTS.
Kakao successfully acquired SM Entertainment, and 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 major player in the tech industry, with Kim holding approximately a 24% stake in the company, which employed over 10,000 people in 2020. At one point, Kim was recognized as South Korea’s richest individual, with an estimated 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 may represent Kakao’s “biggest crisis,” emphasizing the challenge for those remaining at the company to maintain its operations without the founder’s presence.