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 deal last year.
Kim Beom-su, the founder of the technology firm Kakao, has not been officially charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him due to concerns he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim denied the allegations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company expressed that his arrest is “unfortunate.”
At 58 years old, Kim is accused of engaging in stock manipulation involving SM Entertainment during a takeover bid last year, aiming to thwart Hybe, another leading K-pop agency, from acquiring the company.
Both SM Entertainment and Hybe are major players in the South Korean K-Pop industry, representing popular groups such as Aespa and BTS, respectively.
Kakao ultimately succeeded in acquiring SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on similar stock manipulation charges.
Kim established Kakao in 2010 and retains approximately a 24% ownership stake. The company employed over 10,000 workers in 2020. At one point, he was considered South Korea’s wealthiest individual, with an estimated net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock dropped by 5%.
Woochan Kim, a professor at Korea University Business School, commented that this situation could represent Kakao’s “biggest crisis,” adding, “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.”