A South Korean billionaire and tech entrepreneur was taken into custody on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the technology firm Kakao, has yet to be formally charged, according to reports. The Seoul Southern District Court has issued an arrest warrant, with prosecutors expressing concerns that he might flee the country or destroy evidence.
Kim has publicly denied the allegations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts,” during a meeting at Kakao. The company described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment in an effort to block Hybe, another leading K-pop agency, from acquiring it. Both SM Entertainment and Hybe are among South Korea’s largest K-pop companies, representing notable acts like Aespa and BTS.
Kakao ultimately acquired SM Entertainment, while last year, Kakao’s chief investment officer, Bae Jae-hyun, faced indictment on similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao is a major player in the technology sector, with Kim owning approximately 24% of the company. At one time, he was recognized as South Korea’s richest individual, with an estimated net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock experienced a 5% decline. Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis.” He emphasized the responsibility of the remaining leaders at the company to demonstrate that it can function effectively even in the absence of its founder.