A South Korean billionaire and technology entrepreneur has been taken into custody on allegations of manipulating stock prices related to a major K-pop agency during a takeover attempt last year.
Kim Beom-su, the founder of Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court has issued an arrest warrant for him amid concerns that he might flee the country or destroy evidence.
Kim, 58, has publicly denied the accusations, stating during a recent staff meeting at Kakao, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
He is alleged to have manipulated the stock of SM Entertainment to thwart a takeover by rival K-pop agency Hybe. SM Entertainment and Hybe are among South Korea’s leading K-Pop companies, representing popular acts such as Aespa and BTS.
Ultimately, Kakao succeeded in acquiring SM Entertainment, while last year, the company’s chief investment officer, Bae Jae-hyun, was indicted on similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao is known for its diverse technology services. Kim, who holds approximately a 24% stake in the company, was once the wealthiest person in South Korea, with a net worth exceeding $13 billion. Following the arrest, Kakao’s stock experienced a 5% decline.
A professor from Korea University Business School remarked that this situation could represent Kakao’s most significant crisis, emphasizing the importance for the remaining leadership to demonstrate that the company can function effectively in Kim’s absence.