A South Korean billionaire and tech executive was detained 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 the tech firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant to ensure his custody, as authorities expressed concerns that he might flee the country or destroy evidence.
Kim has denied the allegations, asserting in a recent staff meeting that he has never approved or encouraged any illegal activities, and Kakao described the arrest as “unfortunate.”
The 58-year-old businessman stands accused of influencing the stock of SM Entertainment during a takeover last year in an effort to thwart another major K-pop agency, Hybe, from making the acquisition. Both SM Entertainment and Hybe are among South Korea’s leading K-pop companies, representing popular groups such as Aespa and BTS.
Kakao ultimately succeeded in acquiring SM Entertainment, while last year, the firm’s chief investment officer, Bae Jae-hyun, faced similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao, in which Kim holds about a 24% stake, employed over 10,000 people as of 2020. Kim was once considered South Korea’s richest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock price fell by 5% on Tuesday. A professor at Korea University Business School remarked that this could represent Kakao’s most significant crisis, stating it is now the responsibility of remaining company leaders to demonstrate that the firm can operate effectively even in the absence of its founder.