A prominent South Korean billionaire and tech executive was taken into custody on Tuesday for allegedly manipulating the stock price of a leading K-pop agency during a transaction last year.
Kim Beom-su, the founder of the technology giant Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant due to concerns that he might flee the country or tamper with evidence.
In a recent staff meeting at Kakao, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
The 58-year-old entrepreneur faces accusations of influencing the stock performance of SM Entertainment during a takeover attempt last year to thwart rival Hybe’s acquisition plans. SM Entertainment and Hybe are two of the largest K-Pop entities in South Korea, representing popular groups like Aespa and BTS.
Kakao eventually completed the acquisition of SM Entertainment, and 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 as of 2020, the company employed over 10,000 people. He reportedly held around a 24% stake in Kakao and was once listed as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock experienced a 5% drop. Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s most significant crisis, stating, “It would be the job of those who remain at the company to show that it can run well even with the founder not around.”