A South Korean billionaire and tech entrepreneur has been detained for allegedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the tech firm Kakao, was arrested under an order from the Seoul Southern District Court, which expressed concerns that he might flee the country or destroy evidence. Although he has not been formally charged, he has denied the allegations. In a recent meeting with staff, he stated, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao has described the arrest as “unfortunate.”
The 58-year-old Kim is accused of engaging in stock manipulation related to SM Entertainment to thwart rival Hybe, another major K-pop agency, from acquiring it. Both SM Entertainment and Hybe are significant players in the K-pop industry, representing popular groups Aespa and BTS, respectively. Kakao eventually took control of SM Entertainment, and last year, Kakao’s chief investment officer was also indicted for similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao employs over 10,000 people and is largely owned by Kim, who holds a 24% stake in the company. At one point, he was considered South Korea’s richest individual with an estimated net worth exceeding $13 billion. Following the news of his arrest, Kakao’s stock fell by 5%.
Experts believe that this could represent a significant crisis for Kakao. Woochan Kim, a professor at Korea University Business School, emphasized the importance of the remaining leadership maintaining operations effectively in Kim’s absence.