A South Korean billionaire and technology entrepreneur was taken into custody on Tuesday for allegedly manipulating the stock price of a prominent K-pop entertainment firm during a transaction last year.
Kim Beom-su, the founder of the technology company Kakao, has not been officially charged. The Seoul Southern District Court has issued an arrest warrant due to concerns from prosecutors that he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
At 58 years old, Kim is accused of engaging in stock manipulation related to SM Entertainment during a takeover bid last year, allegedly as part of a strategy to thwart another K-pop agency, Hybe, from acquiring the company.
SM Entertainment and Hybe are two of the largest K-pop agencies in South Korea, representing popular groups such as Aespa and BTS.
Kakao eventually acquired SM Entertainment. Additionally, Bae Jae-hyun, Kakao’s chief investment officer, was also indicted last year on similar stock manipulation charges.
Kim founded Kakao in 2010, with its headquarters located in Jeju City. He held an approximately 24% stake in the company, which employed over 10,000 individuals in 2020. At one time, he was considered South Korea’s richest individual, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s share price fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this situation represents Kakao’s “biggest crisis.” He emphasized the importance of demonstrating that the company can operate effectively in the absence of its founder.