A South Korean billionaire and tech leader was arrested 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 faced formal charges, according to reports. The Seoul Southern District Court issued an arrest warrant due to concerns that he might flee the country or destroy evidence.
Kim stated in a recent company meeting that the claims against him were false, asserting he never encouraged any illegal activities. Kakao described the situation as “unfortunate.”
The 58-year-old entrepreneur is accused of interfering with the stock of SM Entertainment during a takeover attempt last year, allegedly to thwart Hybe, another leading K-pop agency, from acquiring it.
Both SM Entertainment and Hybe are significant players in South Korea’s K-Pop industry, representing popular groups Aespa and BTS, respectively.
Kakao eventually completed its acquisition of SM Entertainment. Last year, Kakao’s chief investment officer Bae Jae-hyun faced similar stock manipulation allegations.
Kim founded Kakao in 2010 in Jeju City and held a 24% stake in the company, which employed over 10,000 people in 2020. He once ranked as South Korea’s richest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock prices fell by 5%. Woochan Kim, a business professor at Korea University, suggested that this could represent the company’s most significant crisis, emphasizing the need for remaining leaders at Kakao to demonstrate its ability to function effectively without its founder.