A prominent South Korean billionaire and technology executive was arrested on Tuesday for allegedly engaging in stock price manipulation related to a major K-pop agency during a deal last year.
Kim Beom-su, the founder of the tech firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court authorized the arrest due to concerns that he might flee the country or destroy evidence.
In a staff meeting prior to his arrest, Kim stated, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao has described his arrest as “unfortunate.”
Kim, 58, is accused of manipulating the stock of SM Entertainment during a takeover attempt last year, allegedly to thwart another major K-pop agency, Hybe, from acquiring the company. SM Entertainment and Hybe are among South Korea’s leading K-Pop firms, representing popular groups Aespa and BTS, respectively.
Kakao eventually succeeded in acquiring SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, faced similar charges of stock manipulation.
Founded in 2010 and headquartered in Jeju City, Kakao employs over 10,000 people, with Kim holding approximately a 24% stake in the company. Once considered South Korea’s wealthiest individual, his net worth exceeded $13 billion.
Following news of Kim’s arrest, Kakao’s stock fell by 5% on Tuesday. A professor at Korea University Business School commented that this situation might present Kakao with its “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate that the company can effectively operate in Kim’s absence.