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 technology firm Kakao, has not been officially charged, according to reports. The Seoul Southern District Court authorized his arrest, as prosecutors expressed concerns that he might flee the country or destroy evidence.
“The allegations are not true. I have never instructed or condoned any illegal acts,” Kim stated during a staff meeting at Kakao last week. The company described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment during an attempted takeover last year, allegedly to hinder rival K-pop agency Hybe from acquiring the company.
SM Entertainment and Hybe are among South Korea’s largest K-pop companies, representing popular acts like Aespa and BTS, respectively.
Kakao eventually purchased SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, was also charged with stock manipulation.
Founded in 2010 and headquartered in Jeju City, Kakao employs more than 10,000 people. At one point, Kim was noted as South Korea’s wealthiest individual, 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, commented that this situation could represent Kakao’s “biggest crisis.” He added, “It would be the job of those who remain at the company to demonstrate that it can operate effectively even without the founder.”