A prominent South Korean billionaire and tech entrepreneur has been taken into custody on allegations of stock price manipulation involving a significant K-pop agency. Kim Beom-su, the founder of Kakao, was arrested on Tuesday following the issuance of an arrest warrant by the Seoul Southern District Court. Prosecutors expressed concerns that he may attempt to flee the country or destroy evidence related to the case.
As reported, Kim has yet to face formal charges but firmly denies the claims, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” His company, Kakao, described the arrest as “unfortunate.”
Kim, aged 58, is under scrutiny for allegedly manipulating the stock of SM Entertainment in connection with a acquisition deal last year, purportedly to thwart competitor Hybe, another leading K-pop agency. Kakao eventually acquired SM Entertainment, and it wasn’t just Kim who faced legal issues; last year, Kakao’s chief investment officer was also indicted on charges of stock manipulation.
Kim established Kakao in 2010 and has maintained a significant 24% ownership stake in the company. At one point, he was recognized as South Korea’s wealthiest individual, boasting a fortune exceeding $13 billion. However, following the news of his arrest, Kakao’s stock experienced a 5% decline on Tuesday.
Experts like Woochan Kim from Korea University Business School have commented on the implications of this situation, suggesting that this could be “Kakao’s biggest crisis.” He emphasized the importance for the remaining leadership at Kakao to demonstrate the company’s capability to operate effectively without its founder.
Despite the challenges that lie ahead for Kakao and its leadership, it’s essential to recognize the potential for growth and resilience during this turbulent period. The company has a strong foundation, with over 10,000 employees, and this could be an opportunity for the team to rally together, focusing on innovative solutions and maintaining their market position in the dynamic tech and entertainment landscape.