A South Korean billionaire and tech entrepreneur was taken into custody on Tuesday under suspicion of manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet faced formal charges, according to reports. The Seoul Southern District Court issued an arrest warrant for him as prosecutors were concerned he might flee the country or interfere with the investigation.
In a recent internal meeting at Kakao, Kim denied the allegations, asserting that he has never engaged in or encouraged any illegal activities. Kakao described his arrest as “unfortunate.”
The 58-year-old is accused of manipulating shares of SM Entertainment during a takeover bid aimed at thwarting rival K-pop agency Hybe’s attempt to acquire the same company. SM Entertainment and Hybe are among South Korea’s largest K-pop firms, representing popular groups such as Aespa and BTS.
Kakao eventually purchased SM Entertainment. Additionally, Bae Jae-hyun, Kakao’s chief investment officer, was indicted last year on similar stock manipulation charges.
Kim founded Kakao in 2010, and he held a 24% share in the company, which employed over 10,000 people as of 2020. At one point, he was South Korea’s wealthiest individual, boasting an estimated net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock price fell by 5%. A professor at Korea University Business School commented that this could represent Kakao’s “biggest crisis,” emphasizing that the remaining leadership will need to demonstrate the company’s viability in Kim’s absence.