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 Kakao, has not yet faced formal charges, according to reports. The Seoul Southern District Court issued an arrest warrant, expressing concerns that he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
Kim, aged 58, stands accused of influencing the stock of SM Entertainment during a takeover in a bid to thwart Hybe, another significant player in the K-pop industry, from acquiring the agency.
Both SM Entertainment and Hybe are among the largest K-pop companies in South Korea, representing popular groups like Aespa and BTS.
Kakao ultimately acquired SM Entertainment last year, and previously, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on charges of stock manipulation.
Kim launched Kakao in 2010, and it is based in Jeju City. He holds around a 24% stake in the company, which employed more than 10,000 people as of 2020. At one point, he was considered South Korea’s richest individual, with an estimated worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, commented that this situation may represent Kakao’s “biggest crisis,” stating, “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.”