A South Korean billionaire and technology leader was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of technology firm Kakao, has not yet been formally charged. An arrest warrant was issued by the Seoul Southern District Court due to concerns that he may flee the country or destroy evidence.
In a recent meeting at Kakao, Kim stated, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
Kim, 58, is accused of manipulating the stock of SM Entertainment during last year’s takeover attempt to prevent rival K-pop agency Hybe from acquiring it. Both SM Entertainment and Hybe are leading companies in South Korea’s K-pop industry, representing notable acts such as Aespa and BTS.
Kakao ended up acquiring SM Entertainment, and 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 is a major player in South Korea’s tech landscape, with Kim holding approximately a 24% stake. At one time, he was the country’s richest individual, with a net worth exceeding $13 billion. Following the news of his arrest, Kakao’s stock fell by 5% on Tuesday.
According to Woochan Kim, a professor at Korea University Business School, this situation may represent Kakao’s “biggest crisis.” He emphasized the importance for remaining company leadership to demonstrate that Kakao can continue to function effectively without its founder.