A South Korean billionaire and tech entrepreneur was apprehended on Tuesday for purportedly 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 not yet been formally charged, as reported by the New York Times. The Seoul Southern District Court issued an arrest warrant for him amid concerns from prosecutors that he might flee the country or destroy evidence.
Kim stated in a recent staff meeting at Kakao that the allegations are false, asserting, “I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment during a takeover attempt last year, aiming to thwart Hybe, another major K-pop agency, from acquiring the company.
Both SM Entertainment and Hybe are among the largest K-Pop companies in South Korea, representing popular groups Aespa and BTS, respectively. Kakao ultimately secured the acquisition of SM Entertainment. Last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted on charges related to stock manipulation.
Kim founded Kakao in 2010 and holds approximately a 24% stake in the company, which employed over 10,000 individuals in 2020. At one point, he was recognized as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock fell by 5% on Tuesday. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis,” emphasizing that it will be up to the remaining leadership to demonstrate the company can operate effectively in the absence of its founder.