A South Korean billionaire and tech entrepreneur has been taken into custody on allegations of manipulating the stock price of a leading K-pop agency during a deal last year.
Kim Beom-su, founder of the technology giant Kakao, has not yet been formally charged, but the Seoul Southern District Court has issued a warrant for his arrest due to concerns that he might evade justice or destroy evidence.
In a recent meeting with his staff, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
Kim, aged 58, is accused of artificially inflating the stock of SM Entertainment during a takeover aimed at thwarting a competing purchase by Hybe, another major player in the K-pop industry. Both SM Entertainment and Hybe are among the largest K-pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Ultimately, Kakao succeeded in acquiring SM Entertainment. Last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted on similar stock manipulation accusations.
Founded in 2010 and based in Jeju City, Kakao is heavily influenced by Kim, who holds approximately a 24% stake in the company. By 2020, it employed over 10,000 people. Kim was once recognized as South Korea’s richest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock dropped by 5%. Woochan Kim, a professor at Korea University Business School, commented that this could be Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company’s resilience in Kim’s absence.