A South Korean billionaire and technology entrepreneur, Kim Beom-su, was arrested on Tuesday due to allegations of stock price manipulation involving a major K-pop agency during a transaction last year.
Kim, the founder of the tech company Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court approved an arrest warrant amid concerns that he could flee the country or destroy evidence related to the case.
In a staff meeting last week, Kim denied the allegations, asserting, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment in order to thwart rival K-pop agency Hybe from acquiring the company. SM Entertainment and Hybe are leading players in the K-pop industry, representing popular acts like Aespa and BTS.
Kakao successfully acquired SM Entertainment, and last year, Bae Jae-hyun, Kakao’s chief investment officer, was indicted on similar stock manipulation charges.
Founded by Kim in 2010 and based in Jeju City, Kakao employed over 10,000 people in 2020. At one point, Kim was the wealthiest individual in South Korea, with a personal fortune exceeding $13 billion.
Following the arrest news, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this situation could represent Kakao’s “biggest crisis,” emphasizing the need for those remaining at the company to ensure it continues to operate effectively without its founder.