A South Korean billionaire and tech entrepreneur was arrested Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, founder of the technology company Kakao, has not yet been formally charged. According to reports, the Seoul Southern District Court issued an arrest warrant due to concerns that he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim denied the allegations. “The allegations are not true. I have never instructed or condoned any illegal acts,” he stated. The company described the situation as “unfortunate.”
Kim, aged 58, is accused of manipulating the stock of SM Entertainment during its takeover last year to prevent rival K-pop agency Hybe from acquiring it. SM Entertainment and Hybe are two leading K-pop companies in the country, managing popular groups Aespa and BTS, respectively.
Kakao ultimately acquired SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on charges of stock manipulation.
Founded in 2010 and headquartered in Jeju City, Kakao is a major player in the tech industry, with Kim holding around 24% of the company. In 2020, the company employed over 10,000 people, and at one point, Kim was recognized as South Korea’s richest person, with a net worth exceeding $13 billion.
Following news of Kim’s arrest, Kakao’s stock experienced a 5% decline on Tuesday. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis.” He added, “It would be the job of those who remain at the company to show that it can run well even with the founder not around.”