A South Korean billionaire and tech leader was apprehended 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 has issued an arrest warrant for him to prevent potential flight or destruction of evidence.
During a company meeting last week, Kim stated, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao deemed his arrest as “unfortunate.”
The 58-year-old businessman is accused of manipulating shares of SM Entertainment amid a takeover bid last year, in a scheme purportedly aimed at thwarting an acquisition by Hybe, another leading K-pop agency.
Both SM Entertainment and Hybe are key players in the K-pop industry, representing popular groups Aespa and BTS, respectively. Kakao successfully acquired SM Entertainment, and last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on charges of stock manipulation.
Kim, who founded Kakao in Jeju City in 2010, holds approximately a 24% stake in the company, which employed over 10,000 people in 2020. He was previously recognized as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, suggested that this situation could represent “the biggest crisis” for Kakao. He emphasized that it is now incumbent upon those remaining in the company to demonstrate that it can continue to operate effectively without its founder.