A South Korean billionaire and technology entrepreneur was arrested on Tuesday 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 faced formal charges, according to reports. The Seoul Southern District Court issued an arrest warrant amid concerns that he might flee the country or destroy evidence.
In a recent meeting with staff at Kakao, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
The 58-year-old entrepreneur is accused of manipulating the stock of SM Entertainment during a takeover attempt, allegedly to thwart rival K-pop agency Hybe’s acquisition efforts. SM Entertainment and Hybe are two of the largest K-pop firms in South Korea, managing major acts such as Aespa and BTS.
Kakao successfully acquired SM Entertainment, while last year, the company’s chief investment officer, Bae Jae-hyun, was indicted on similar stock manipulation charges.
Kim founded Kakao in 2010 and held about a 24% stake in the company, which employed over 10,000 individuals in 2020. He was once recognized as South Korea’s wealthiest individual, boasting an estimated net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock suffered a 5% decline on Tuesday.
Woochan Kim, a professor at Korea University Business School, remarked that this situation could represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to ensure the company’s effective management in Kim’s absence.