A South Korean billionaire and tech entrepreneur has been taken into custody on allegations of stock price manipulation involving a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet faced formal charges, as reported by the New York Times. The Seoul Southern District Court approved an arrest warrant over concerns that he might flee the country or tamper with evidence.
“I have never instructed or condoned any illegal acts. The allegations are not true,” Kim stated during a recent staff meeting at Kakao. The company described his arrest as “unfortunate.”
The 58-year-old entrepreneur is accused of manipulating the stock of SM Entertainment to obstruct Hybe, another major K-pop agency, from acquiring it during a takeover attempt last year. Both SM Entertainment and Hybe are leading figures in the K-pop industry, representing iconic groups such as Aespa and BTS.
In the end, Kakao successfully acquired SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, also faced charges related to stock manipulation.
Founded in 2010 in Jeju City, Kakao is a significant player in South Korea’s tech sector. Kim holds around 24% of the company’s shares, which, as of 2020, employed over 10,000 individuals. He was once the wealthiest person in South Korea, boasting a net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock experienced a decline of 5% on Tuesday. According to Woochan Kim, a professor at Korea University Business School, this situation may represent Kakao’s “biggest crisis.” He emphasized that it will be up to the remaining leadership to demonstrate that the company can thrive even in the absence of its founder.