A South Korean billionaire and tech entrepreneur was apprehended on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a deal executed last year.
Kim Beom-su, the founder of the technology firm Kakao, has yet to face formal charges, as reported by the New York Times. A Seoul Southern District Court has issued an arrest warrant for him due to 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 staff meeting at Kakao. The company deemed the arrest “unfortunate.”
Kim, 58, is accused of stock manipulation involving SM Entertainment during a takeover bid last year, in an effort to thwart Hybe, another major player in the K-pop industry, from acquiring the agency.
Both SM Entertainment and Hybe are among South Korea’s largest K-pop firms, representing popular groups Aespa and BTS, respectively. Kakao eventually secured the acquisition of SM Entertainment. Last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted on charges related to stock manipulation.
Founded in 2010 and based in Jeju City, Kakao is a significant employer, with over 10,000 staff members reported in 2020. At one point, Kim was recognized as South Korea’s richest individual, boasting a net worth exceeding $13 billion.
Following the announcement of his arrest, Kakao’s stock price fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this situation could represent Kakao’s “biggest crisis.”
“It will be the responsibility of those who remain at the company to demonstrate that it can operate successfully even in the absence of the founder,” he said.