A South Korean billionaire and tech entrepreneur was apprehended on Tuesday for allegedly engaging in stock price manipulation involving a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the tech firm Kakao, has not yet been formally charged with any offenses according to reports. The Seoul Southern District Court issued an arrest warrant amid concerns from prosecutors that he might flee the country or destroy evidence linked to the case.
In a recent staff meeting at Kakao, Kim firmly denied the allegations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao has described the arrest as “unfortunate.”
The charges stem from claims that Kim manipulated the stock of SM Entertainment to thwart a takeover attempt by Hybe, another leading K-pop agency. SM Entertainment is known for representing popular groups like Aespa, while Hybe is home to the globally popular BTS.
Kakao had previously acquired SM Entertainment, while Kakao’s chief investment officer, Bae Jae-hyun, was also indicted last year on charges related to stock manipulation.
Founded in 2010 and headquartered in Jeju City, Kakao employs over 10,000 people as of 2020, and Kim held a significant ownership stake in the company. At one time, he was recognized as South Korea’s wealthiest individual, boasting an estimated net worth exceeding $13 billion. Following the arrest, Kakao’s stock price fell by 5%.
Korea University Business School professor Woochan Kim remarked that this situation could represent one of Kakao’s most significant challenges to date. He emphasized that the responsibility now lies with the remaining leadership to demonstrate that the company can continue to thrive despite the challenges posed by Kim’s absence.
This event casts a shadow over Kakao and the K-pop industry, but it also presents an opportunity for innovation and resilience. As the company navigates these turbulent waters, it can emerge stronger with effective leadership and a commitment to integrity.
In summary, the arrest of Kim Beom-su poses questions about Kakao’s future, but it could also serve as a catalyst for positive change within the organization and the broader industry.