A South Korean billionaire and technology executive was detained on Tuesday over allegations of stock price manipulation concerning a prominent K-pop agency last year.
Kim Beom-su, the founder of technology firm Kakao, has not yet been formally charged. The Seoul Southern District Court issued an arrest warrant due to concerns that he might attempt to flee the country or destroy evidence. Kim maintained his innocence during a staff meeting at Kakao, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao deemed the arrest “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment in connection with a takeover attempt last year to obstruct rival K-pop agency Hybe from purchasing the company. SM Entertainment and Hybe are among South Korea’s leading K-pop firms, associated with artists such as Aespa and BTS, respectively.
Ultimately, Kakao went on to acquire SM Entertainment, and last year, the company’s chief investment officer, Bae Jae-hyun, was indicted on similar stock manipulation charges.
Kim established Kakao in 2010 in Jeju City and retained approximately a 24% ownership stake. The company had over 10,000 employees as of 2020. At one point, he was the wealthiest individual in South Korea, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock price fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company can thrive without its founder.