A South Korean billionaire and tech leader was taken into custody 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 technology firm Kakao, has not yet been formally charged. The Seoul Southern District Court issued an arrest warrant for him due to concerns that he might flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts. The allegations are not true,” Kim stated during a company meeting at Kakao last week. The company described the arrest as “unfortunate.”
At 58 years old, Kim is accused of influencing the stock of SM Entertainment during a takeover bid last year, attempting to hinder rival K-pop agency Hybe from acquiring it.
SM Entertainment and Hybe are among the largest K-pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Kakao eventually secured the acquisition of SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted for stock manipulation.
Kim, who started the company in 2010 and owns around a 24% share, had over 10,000 employees in 2020 and was once South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock declined by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis,” emphasizing that it will be crucial for the remaining team to demonstrate effective leadership in Kim’s absence.