A South Korean billionaire and technology entrepreneur was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the technology giant Kakao, has not yet been formally charged with any crimes, according to reports. An arrest warrant was issued by the Seoul Southern District Court, as authorities expressed concerns that he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim denied the allegations, stating, “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 businessman is accused of influencing the stock of SM Entertainment amid a takeover attempt last year aimed at thwarting another major K-pop agency, Hybe, from acquiring the company.
SM Entertainment and Hybe are among the largest K-pop firms in South Korea, known for managing popular groups Aespa and BTS, respectively. Ultimately, Kakao went on to acquire SM Entertainment. In a related case, Kakao’s chief investment officer, Bae Jae-hyun, was indicted last year on stock manipulation charges.
Kim established Kakao in 2010, and as of 2020, the company employed over 10,000 people. He once held the title of South Korea’s richest individual, with an estimated net worth surpassing $13 billion.
Following the news of his arrest, Kakao’s stock declined by 5%. Woochan Kim, a professor at Korea University Business School, suggested that this situation might represent “Kakao’s biggest crisis.” He emphasized the importance for those remaining at the company to demonstrate effective leadership in Kim’s absence.