A South Korean billionaire and tech executive has been arrested for allegedly manipulating the stock price of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged. The Seoul Southern District Court issued an arrest warrant due to concerns that he might flee the country or destroy evidence.
“Asserting that I have engaged in any illegal activities is completely false. I have never encouraged such actions,” Kim stated during a recent company meeting. Kakao referred to the arrest as “unfortunate.”
The 58-year-old entrepreneur faces accusations of influencing the stock of SM Entertainment amid a takeover attempt last year, with intentions to obstruct rival agency Hybe from acquiring it.
SM Entertainment and Hybe are two of South Korea’s largest K-pop firms, representing popular groups like Aespa and BTS, respectively. Kakao eventually purchased SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on similar stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao has seen its stock fall 5% following the news of Kim’s arrest. Kim holds approximately a 24% stake in the company, which employed over 10,000 people in 2020. At one time, he was considered South Korea’s wealthiest individual, with an estimated net worth exceeding $13 billion.
Prof. Woochan Kim from Korea University Business School commented that this situation could be Kakao’s “biggest crisis” and emphasized the need for the remaining team to demonstrate the company’s resilience in the founder’s absence.