A South Korean billionaire and tech entrepreneur has been taken into custody 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 not yet been formally charged. An arrest warrant was issued by the Seoul Southern District Court due to concerns from prosecutors that he may flee the country or destroy evidence.
Kim, 58, has denied the allegations, stating during a recent staff meeting at Kakao, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the situation as “unfortunate.”
He is accused of manipulating the stock of SM Entertainment during a takeover attempt last year, allegedly as part of a scheme to thwart Hybe, another major K-pop agency, from acquiring it. SM Entertainment and Hybe are two of South Korea’s leading K-Pop firms, associated with the groups Aespa and BTS, respectively.
Kakao eventually acquired SM Entertainment. Last year, the firm’s chief investment officer, Bae Jae-hyun, was indicted on similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao had over 10,000 employees in 2020, with Kim holding approximately a 24% stake in the company. At one time, he was South Korea’s wealthiest individual, boasting an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5%. A business professor at Korea University, Woochan Kim, suggested that this could represent the “biggest crisis” for Kakao, emphasizing that it would now be up to the remaining executives to ensure the company continues to thrive without its founder.