A South Korean billionaire and tech entrepreneur was arrested on Tuesday for allegedly manipulating the stock prices of a leading K-pop agency during a deal that took place 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 amid concerns from prosecutors that he might flee the country or destroy evidence.
Kim asserted in a recent staff meeting that the allegations are false, stating, “I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment as part of a strategy to thwart Hybe, another prominent K-pop agency, from acquiring it. SM Entertainment and Hybe are among the largest K-pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Kakao eventually completed the acquisition of SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, was also indicted on similar stock manipulation charges.
Kim established Kakao in 2010, and he held around a 24% stake in the company, which employed over 10,000 people as of 2020. At one point, he was considered South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, commented that this could be Kakao’s most significant crisis yet, emphasizing the company’s need to demonstrate its stability in Kim’s absence.