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 deal last year.
Kim Beom-su, the founder of the tech company Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant, expressing concerns that he may flee the country or destroy evidence.
Kim claimed, “The allegations are not true. I have never instructed or condoned any illegal acts,” during a recent meeting at Kakao. The company described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating SM Entertainment’s stock in a bid to thwart Hybe, another major K-pop agency, from acquiring it. Both SM Entertainment and Hybe are among South Korea’s leading K-pop companies, with SM representing artists like Aespa and Hybe home to BTS.
Ultimately, Kakao completed the acquisition of SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, was also indicted on charges of stock manipulation.
Kim, who founded the company in 2010 and holds approximately a 24% stake, had employed over 10,000 people by 2020. He was once considered South Korea’s wealthiest individual, with a net worth surpassing $13 billion.
Following news of his arrest, Kakao’s stock fell by 5% on Tuesday. A professor from Korea University Business School remarked that this could be Kakao’s “biggest crisis,” emphasizing the need for the remaining executives to demonstrate the company’s stability in Kim’s absence.