A South Korean billionaire and tech entrepreneur has been arrested for allegedly manipulating the stock price of a prominent K-pop agency during a transaction that took place last year.
Kim Beom-su, founder of the tech company Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court granted an arrest warrant due to concerns that he may try to leave the country or destroy evidence related to the case.
Kim has denied the allegations, asserting in a staff meeting that he has never authorized or approved any illegal actions. Kakao described the arrest as “unfortunate.”
The 58-year-old entrepreneur is accused of manipulating the stock of SM Entertainment during a takeover attempt to thwart rival K-pop agency Hybe from acquiring it. SM Entertainment and Hybe are two of South Korea’s leading K-pop companies, managing notable acts such as Aespa and BTS.
Ultimately, Kakao completed the acquisition of SM Entertainment. Last year, the chief investment officer of Kakao, Bae Jae-hyun, was also indicted on charges of stock manipulation.
Kim founded Kakao, based in Jeju City, in 2010. He holds approximately a 24% stake in the company, which had over 10,000 employees in 2020. At one point, he was recognized as South Korea’s richest individual, with a net worth exceeding $13 billion.
Following the announcement of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, indicated that this could represent Kakao’s “biggest crisis” and emphasized the importance of the remaining leadership demonstrating the company’s ability to function effectively in Kim’s absence.