A South Korean billionaire and tech entrepreneur 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 the technology firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court has issued an arrest warrant to ensure his presence, as prosecutors expressed concerns that he might flee the country or destroy evidence.
During a staff meeting at Kakao last week, Kim denied the accusations, stating, “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 amid a takeover last year, allegedly as part of a plot to thwart rival K-pop agency Hybe from acquiring the company.
SM Entertainment and Hybe are two of South Korea’s leading K-pop agencies, representing popular groups Aespa and BTS, respectively.
Kakao eventually completed the acquisition of SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, was also indicted on charges related to stock manipulation.
Founded in 2010 and based in Jeju City, Kakao is a major player in the tech industry, with Kim holding approximately a 24% stake in the company. At one time, he was recognized as South Korea’s richest individual, with an estimated fortune exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock fell by 5% on Tuesday. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis,” emphasizing the responsibility of the remaining leadership to demonstrate operational stability in Kim’s absence.