A billionaire and tech entrepreneur from South Korea 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 technology giant Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant to ensure his custody, as prosecutors expressed concerns he might flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts,” Kim asserted during a recent staff meeting at Kakao. The company described the news of his arrest as “unfortunate.”
At 58 years old, Kim is accused of manipulating shares of SM Entertainment during a takeover last year, intending to thwart rival K-pop agency Hybe from acquiring it.
SM Entertainment and Hybe are recognized as two of the largest K-pop companies in South Korea, managing popular groups Aespa and BTS, respectively.
Kakao eventually completed the acquisition of SM Entertainment. Additionally, last year, Kakao’s chief investment officer Bae Jae-hyun was indicted on similar stock manipulation charges.
Founded in 2010 and headquartered in Jeju City, Kakao has grown to employ over 10,000 individuals as of 2020. Kim, who holds approximately a 24% stake in the company, was once considered South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the announcement of Kim’s arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, suggested that this might represent Kakao’s “biggest crisis,” stating that it will be crucial for the remaining team to demonstrate that the company can thrive in the absence of its founder.