A billionaire and tech entrepreneur from South Korea was taken into custody on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency in connection with a deal last year.
Kim Beom-su, founder of the technology firm Kakao, has yet to face formal charges, according to the New York Times. The Seoul Southern District Court issued an arrest warrant, citing concerns that Kim might flee the country or destroy evidence.
In a recent meeting with Kakao staff, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
The 58-year-old is accused of interfering with the stock of SM Entertainment during a takeover attempt, aiming to thwart rival K-pop agency Hybe from acquiring the company.
Both SM Entertainment and Hybe are major players in South Korea’s K-Pop industry, representing popular groups Aespa and BTS, respectively.
Kakao ultimately succeeded in acquiring SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted for stock manipulation.
Kim founded Kakao in 2010, and he holds approximately a 24% stake in the company, which employed over 10,000 individuals as of 2020. At one point, Kim was the richest person in South Korea, with an estimated net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock dropped by 5%. Woochan Kim, a professor at Korea University Business School, stated that this might represent “Kakao’s biggest crisis.” He emphasized that it would be up to the remaining leadership at the company to demonstrate that it can operate effectively in Kim’s absence.