A South Korean billionaire and tech entrepreneur was apprehended on Tuesday for allegedly engaging in stock price manipulation concerning a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the technology firm Kakao, has yet to be formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him amid concerns from prosecutors 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 in a staff meeting at Kakao last week. The company described the arrest as “unfortunate.”
Kim, 58, is accused of altering the stock of SM Entertainment during a takeover bid last year to thwart Hybe, another significant K-pop agency, from acquiring it.
SM Entertainment and Hybe are among the largest K-Pop firms in South Korea, representing popular groups such as Aespa and BTS.
Kakao eventually acquired SM Entertainment. Additionally, last year, Kakao’s chief investment officer Bae Jae-hyun was indicted on similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao employs over 10,000 people, as reported in 2020. Kim was once South Korea’s wealthiest individual, boasting an estimated net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock dropped by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis.” He noted, “It would be the job of those who remain at the company to demonstrate that it can operate effectively even without the founder.”