A South Korean billionaire and technology entrepreneur has been arrested for allegedly manipulating the stock price of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of Kakao, has not yet been formally charged. The Seoul Southern District Court issued an arrest warrant, citing concerns that he might flee the country or destroy evidence.
Kim denied the allegations during a recent staff meeting, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
The 58-year-old businessman is accused of manipulating the stock of SM Entertainment during a takeover bid to block Hybe, another leading K-pop company, from acquiring it. SM Entertainment and Hybe are among the largest K-pop agencies in South Korea, representing popular acts such as Aespa and BTS.
Kakao eventually acquired SM Entertainment, and last year, Kakao’s chief investment officer was also indicted for stock manipulation.
Starting his company in Jeju City in 2010, Kim controlled approximately 24% of Kakao, which employed over 10,000 people in 2020. At one point, he was South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock price dropped by 5%. A business professor at Korea University remarked that this incident might represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company can operate effectively without its founder.