A South Korean billionaire and tech leader was apprehended on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of Kakao, has not yet been formally charged, according to reports from the New York Times. The Seoul Southern District Court has issued an arrest warrant to ensure his custody, as prosecutors are concerned he might flee the country or destroy evidence.
Kim stated in a recent staff meeting at Kakao, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
The 58-year-old businessman is accused of interfering with the stock of SM Entertainment amid a takeover attempt last year, allegedly to block rival K-pop agency Hybe from acquiring the company.
SM Entertainment and Hybe represent two of South Korea’s leading K-Pop firms, managing popular groups Aespa and BTS respectively.
Kakao ended up purchasing SM Entertainment, and last year, the company’s chief investment officer Bae Jae-hyun was also indicted for stock manipulation.
Founded by Kim in Jeju City in 2010, Kakao had over 10,000 employees as of 2020, and at one time, Kim was the richest person in South Korea, with a net worth estimated at more than $13 billion.
Following the news of his arrest, Kakao’s stock price fell by 5%. Woochan Kim, a professor at Korea University Business School, noted that this could represent Kakao’s “biggest crisis.”
He added, “It would be the job of those who remain at the company to show that it can run well even with the founder not around.”