A South Korean tech tycoon and billionaire was detained on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the technology firm Kakao, has not been formally charged yet, as reported by the New York Times. The Seoul Southern District Court has issued an arrest warrant, as prosecutors are concerned he may flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts,” Kim stated during a staff meeting at Kakao last week, denying the allegations. Kakao described the arrest as “unfortunate.”
The 58-year-old entrepreneur is accused of manipulating the stock of SM Entertainment during a takeover attempt last year, allegedly to thwart Hybe—a rival K-pop agency—from acquiring it.
SM Entertainment and Hybe are two of the largest K-Pop companies in South Korea, representing popular acts such as Aespa and BTS.
Kakao eventually acquired SM Entertainment, while last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao, in which Kim holds a 24% stake, employed over 10,000 people in 2020. At one point, Kim was recognized as South Korea’s wealthiest individual, with an estimated net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock fell 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis,” adding, “It would be the job of those who remain at the company to show that it can run well even with the founder not around.”