A South Korean billionaire and tech entrepreneur has been arrested for allegedly manipulating the stock price of a leading K-pop agency during a deal last year. Kim Beom-su, founder of the technology firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him due to 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.”
Kim, 58, is accused of interfering with the stock of SM Entertainment during a takeover attempt last year, allegedly to thwart the acquisition by Hybe, another prominent K-pop agency. SM Entertainment and Hybe are two of the largest companies in South Korea’s K-pop industry, associated with popular groups Aespa and BTS, respectively.
Kakao ultimately acquired SM Entertainment. Last year, Bae Jae-hyun, the chief investment officer of Kakao, was also indicted on charges of stock manipulation.
Founded in 2010 and based in Jeju City, Kakao is a major player in the technology sector, with Kim holding a 24% stake in the company. It employed over 10,000 people in 2020, and at one time, Kim was recognized as South Korea’s richest individual, with a net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, noted that this could be Kakao’s “biggest crisis” and remarked that it will be up to the remaining leadership to demonstrate that the company can operate effectively without its founder.