A South Korean billionaire and tech entrepreneur was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the tech company Kakao, has not yet been formally charged. An arrest warrant was issued by the Seoul Southern District Court due to concerns that he might leave the country or tamper with evidence.
In a recent staff meeting at Kakao, Kim stated, “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 manipulating the stock of SM Entertainment as part of an effort to thwart Hybe, another leading K-pop agency, from acquiring it.
Both SM Entertainment and Hybe are significant players in the South Korean K-pop industry, representing popular groups Aespa and BTS, respectively.
Kakao eventually acquired SM Entertainment, and last year, the company’s chief investment officer, Bae Jae-hyun, was also indicted on charges of stock manipulation.
Kim founded Kakao in 2010, and the company, which is based in Jeju City, had over 10,000 employees by 2020. He was once the richest person in South Korea, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company’s resilience without its founder.