A South Korean billionaire and technology leader 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 the tech firm Kakao, has not been formally charged yet. The Seoul Southern District Court has issued an arrest warrant for him, expressing concerns that he may attempt to flee the country or destroy evidence.
During a recent company staff meeting, Kim stated, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
Kim, 58, is accused of interfering with the stock of SM Entertainment during a takeover, purportedly as part of a plan to hinder Hybe, another significant K-pop agency, from acquiring the company.
Both SM Entertainment and Hybe are major players in South Korea’s K-pop industry, representing popular groups Aespa and BTS, respectively.
Kakao eventually took over SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, also faced indictment on stock manipulation charges.
Kim founded Kakao in 2010, with its headquarters located in Jeju City. He retains about a 24% ownership stake and the company employed over 10,000 personnel in 2020. At one time, Kim was recognized as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock dipped by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis.”
“It will be the responsibility of those who remain at the company to demonstrate that it can operate effectively even in the absence of the founder,” he noted.