A South Korean billionaire and tech entrepreneur was taken into custody on Tuesday amid allegations of stock price manipulation linked to a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of technology firm Kakao, has not yet faced formal charges, according to reports. The Seoul Southern District Court authorized his arrest due to concerns that he might flee the country or destroy incriminating 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 his arrest as “unfortunate.”
The 58-year-old is accused of influencing the stock of SM Entertainment during a takeover last year in a bid to thwart rival Hybe, another major K-pop agency, from acquiring the company.
SM Entertainment and Hybe are among the largest K-Pop enterprises in South Korea, representing popular groups such as Aespa and BTS.
Ultimately, Kakao secured the acquisition of SM Entertainment. In addition, Kakao’s chief investment officer, Bae Jae-hyun, was indicted for similar stock manipulation offenses last year.
Founded in 2010 and based in Jeju City, Kakao is led by Kim, who holds approximately a 24% ownership stake and had over 10,000 employees as of 2020. At his peak, Kim was considered South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock price fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis,” stressing that it was essential for those remaining at the company to demonstrate its capability to operate effectively in the absence of its founder.