A South Korean billionaire and tech entrepreneur has been arrested on allegations of stock price manipulation involving a prominent K-pop agency during a transaction last year. Kim Beom-su, the founder of Kakao, is yet to be formally charged. An arrest warrant was issued by the Seoul Southern District Court due to concerns that he might flee the country or destroy evidence.
In a recent company meeting, Kim denied the allegations, asserting, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the situation as “unfortunate.”
The 58-year-old is accused of interfering with the stock of SM Entertainment amid a takeover bid last year, as part of a plot to thwart the acquisition attempts of another major K-pop agency, Hybe. SM Entertainment and Hybe are two of South Korea’s leading K-pop companies, known for representing artists such as Aespa and BTS.
Kakao ultimately completed the acquisition of SM Entertainment. Notably, last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on charges related to stock manipulation.
Founded in 2010, Kakao is based in Jeju City and employs over 10,000 people, with Kim holding approximately a 24% stake. At one point, he was considered South Korea’s wealthiest individual, boasting a net worth exceeding $13 billion. Following the news of Kim’s arrest, Kakao’s stock price dropped by 5%.
Woochan Kim, a professor at Korea University Business School, commented that this incident might be Kakao’s “biggest crisis,” emphasizing the importance for the remaining leadership to demonstrate the company’s stability in the absence of its founder.