A South Korean billionaire and tech entrepreneur was taken into custody on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a transaction that occurred last year.
Kim Beom-su, the founder of the technology firm Kakao, has not received any formal charges against him, according to reports. The Seoul Southern District Court has issued an arrest warrant for him due to concerns that he might attempt to flee the country or destroy evidence.
Kim denied the allegations during a company meeting, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
At the age of 58, Kim is accused of distorting SM Entertainment’s stock during a takeover attempt to thwart rival K-pop agency Hybe from acquiring the company.
SM Entertainment and Hybe are recognized as two of South Korea’s largest K-Pop firms, managing popular groups Aespa and BTS, respectively.
Kakao successfully acquired SM Entertainment, and last year, the company’s chief investment officer, Bae Jae-hyun, was also indicted for stock manipulation.
Kim established Kakao in 2010, with headquarters in Jeju City. He holds approximately a 24% stake in the company, which employed over 10,000 individuals as of 2020. At one point, he was considered South Korea’s wealthiest individual, boasting an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock experienced a 5% decline on Tuesday.
Korea University Business School professor Woochan Kim remarked that this incident could represent Kakao’s “biggest crisis,” emphasizing that it will be the responsibility of the remaining team to demonstrate that the company can continue to thrive without its founder’s presence.