A South Korean billionaire and technology entrepreneur was apprehended 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 the tech firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court authorized an arrest warrant for him, citing concerns that he might flee the country or destroy evidence.
“The allegations are not true. I have never instructed or condoned any illegal acts,” Kim stated during a staff meeting at Kakao last week. The company described the arrest as “unfortunate.”
The 58-year-old is accused of stock manipulation related to SM Entertainment during a takeover attempt last year, reportedly aimed at thwarting Hybe, another leading K-pop agency, from acquiring the company.
SM Entertainment and Hybe are two of the largest names in the K-pop industry, representing groups such as Aespa and BTS, respectively. Kakao eventually succeeded in acquiring SM Entertainment. In addition, Bae Jae-hyun, Kakao’s chief investment officer, was indicted last year on similar stock manipulation allegations.
Founded in 2010 and based in Jeju City, Kakao has grown to employ over 10,000 people as of 2020, with Kim holding approximately 24% of the company’s shares. He was once the wealthiest person in South Korea, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock dropped by 5%. A professor at Korea University Business School commented that this situation could represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company’s resilience in the absence of its founder.