A South Korean billionaire and tech entrepreneur was taken into custody on Tuesday for allegedly manipulating the stock prices of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged. The Seoul Southern District Court granted an arrest warrant for his detention amid concerns from prosecutors that he might flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts. The allegations are not true,” Kim stated during a recent staff meeting at Kakao. The company described the arrest as “unfortunate.”
The 58-year-old is suspected of influencing the stock of SM Entertainment during a takeover attempt last year to thwart a competing acquisition by Hybe, another leading K-pop agency.
SM Entertainment and Hybe are two of South Korea’s largest music companies, representing popular groups Aespa and BTS, respectively.
Kakao eventually completed its acquisition of SM Entertainment. In the previous year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao is a major player in the tech industry, with Kim owning around 24% of its shares. In 2020, the company had a workforce exceeding 10,000. Kim was once the richest person in South Korea, with a net worth estimated at over $13 billion.
Following the news of his arrest, Kakao’s stock dropped by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis,” emphasizing that it will be up to the remaining leadership to ensure the company operates effectively in Kim’s absence.