Korean Tech Tycoon Detained: Stock Manipulation Scandal Rocks K-Pop Agency

A South Korean billionaire and tech entrepreneur 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 technology firm Kakao, has not yet been formally charged, as reported by the New York Times. Authorities at the Seoul Southern District Court authorized his arrest due to concerns that he might attempt to flee the country or destroy evidence.

Kim asserted during a meeting with Kakao staff last week, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”

The 58-year-old is alleged to have influenced the stock of SM Entertainment amid a takeover last year, aiming to thwart a rival acquisition by Hybe, another major K-pop agency.

Both SM Entertainment and Hybe are among South Korea’s leading K-pop companies, representing popular groups Aespa and BTS, respectively.

Kakao eventually took over SM Entertainment. Last year, the company’s chief investment officer, Bae Jae-hyun, faced similar charges related to stock manipulation.

Kim founded Kakao in 2010 in Jeju City and owns approximately a 24% stake in the company, which employed over 10,000 people in 2020. He was once recognized as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.

Following the news of his arrest, Kakao’s stock experienced a decline of 5% on Tuesday.

Woochan Kim, a professor at Korea University Business School, commented that this might represent Kakao’s “biggest crisis,” highlighting the importance of demonstrating effective management despite the founder’s absence.

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