A prominent South Korean billionaire and technology executive has been arrested on allegations of stock price manipulation involving a leading K-pop agency during a deal last year.
Kim Beom-su, the founder of Kakao, has not yet been formally charged. The Seoul Southern District Court issued a warrant for his arrest amid concerns that he could flee the country or destroy evidence. Kim has denied the allegations, stating in a recent meeting at Kakao, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
The 58-year-old entrepreneur is accused of manipulating the stock of SM Entertainment last year to thwart Hybe, another major K-pop company, from acquiring it. SM Entertainment and Hybe are two leading players in the K-pop industry, representing popular groups like Aespa and BTS.
Kakao eventually acquired SM Entertainment, and last year, the company’s chief investment officer, Bae Jae-hyun, faced similar stock manipulation charges.
Founded in 2010 in Jeju City, Kakao has grown significantly, employing over 10,000 individuals by 2020. At one time, Kim was the richest person in South Korea, boasting 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, commented that this could represent “Kakao’s biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company’s stability without its founder.