A South Korean billionaire and tech entrepreneur was apprehended on Tuesday for allegedly tampering with 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 faced formal charges, as reported by the New York Times. An arrest warrant was issued by the Seoul Southern District Court, with prosecutors expressing concerns that he might flee the country or destroy evidence.
“The allegations are not true. I have never instructed or condoned any illegal acts,” Kim stated in a recent staff meeting at Kakao. The company described his arrest as “unfortunate.”
At the age of 58, Kim is accused of manipulating the stock of SM Entertainment amid a takeover last year, allegedly to thwart Hybe, another prominent K-pop agency, from acquiring it.
SM Entertainment and Hybe are two of South Korea’s largest K-pop firms, representing artists such as Aespa and BTS, respectively.
Kakao eventually acquired SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted for stock manipulation.
Kim established Kakao in 2010 in Jeju City. He held about a 24% stake in the company, which employed over 10,000 people in 2020. At one point, he was considered South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock dropped by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis.”
“It would be the job of those who remain at the company to show that it can run well even without the founder’s presence,” he added.