A South Korean billionaire and technology executive, Kim Beom-su, was arrested on Tuesday for allegedly manipulating the stock prices of a prominent K-pop agency during a transaction last year.
The founder of Kakao, a leading technology firm, has not yet been formally charged. A Seoul Southern District Court issued an arrest warrant amid concerns from prosecutors that he might flee the country or destroy evidence.
In a recent staff meeting, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
Kim, 58, is accused of manipulating the stock of SM Entertainment during a takeover attempt last year to thwart Hybe, another significant K-pop agency, from acquiring the company.
SM Entertainment and Hybe represent two of the largest K-Pop entities in South Korea, known for their management of stars like Aespa and BTS, respectively. Ultimately, Kakao succeeded in acquiring SM Entertainment. Additionally, last year, Kakao’s chief investment officer Bae Jae-hyun was indicted on similar stock manipulation charges.
Kim established Kakao in 2010, which is based in Jeju City and had over 10,000 employees by 2020. He was once considered South Korea’s wealthiest individual, with a net worth exceeding $13 billion. Following the news of his arrest, Kakao’s stock fell by 5% 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 those remaining at the company to demonstrate its capability to function successfully in the founder’s absence.