A South Korean billionaire and tech executive 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. An arrest warrant was issued by the Seoul Southern District Court, as prosecutors expressed concerns that he might flee the country or destroy evidence.
“I deny the allegations. I have never directed or approved of any illegal activities,” Kim stated during a staff meeting at Kakao last week. The company described the arrest as “unfortunate.”
The 58-year-old businessman is accused of manipulating the shares of SM Entertainment last year to disrupt a takeover attempt by Hybe, another leading K-pop agency.
SM Entertainment and Hybe are among the largest K-pop firms in South Korea, representing popular groups Aespa and BTS, respectively.
Kakao eventually completed the acquisition of SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also charged with stock manipulation.
Founded in 2010 and headquartered in Jeju City, Kakao is a major player in the tech industry, with Kim holding approximately a 24% ownership stake. At his peak, Kim was the richest individual in South Korea, with a net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock price dropped by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis.”
“It will be up to those who remain at the company to demonstrate that it can operate successfully without the founder,” he added.