A prominent South Korean billionaire and tech entrepreneur was taken into custody on Tuesday for allegedly influencing the stock price of a leading K-pop agency during a transaction last year.
Kim Beom-su, the founder of tech giant Kakao, has yet to face formal charges, according to reports. An arrest warrant was issued by the Seoul Southern District Court amid 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 recent company meeting at Kakao. The firm described his arrest as “unfortunate.”
At 58 years old, Kim faces accusations of manipulating the stock of SM Entertainment during a takeover attempt aimed at thwarting Hybe, another major K-pop agency, from acquiring it.
SM Entertainment and Hybe are two of South Korea’s largest K-pop enterprises, representing popular groups such as Aespa and BTS. Ultimately, Kakao successfully acquired SM Entertainment, while last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on charges of stock manipulation.
Kim established Kakao in 2010, and he retains approximately a 24% stake in the company, which employed over 10,000 individuals in 2020. At one time, he was recognized as South Korea’s richest individual, with an estimated net worth exceeding $13 billion.
In the wake of his arrest, Kakao’s stock price dropped by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this situation may present Kakao’s “biggest crisis.” He emphasized that it will be essential for those who remain at the company to demonstrate that it can effectively operate without its founder.