A South Korean billionaire and technology entrepreneur was taken into custody on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a transaction 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 has authorized his arrest due to concerns that he might flee the country or destroy evidence.
“I firmly deny the allegations. I have never directed or permitted any unlawful acts,” Kim stated during a meeting at Kakao last week. The company described his arrest as “unfortunate.”
The 58-year-old is accused of orchestrating stock manipulation involving SM Entertainment during a takeover attempt aimed at thwarting Hybe, another major K-pop agency, from acquiring the company. SM Entertainment and Hybe are significant players in the K-pop industry, representing popular groups like Aespa and BTS.
Kakao eventually secured SM Entertainment in the deal. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also charged with stock manipulation.
Kim established Kakao in 2010, and he held about a 24% stake in the company, which employed over 10,000 individuals in 2020. At one time, he was considered South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following news of Kim’s arrest, Kakao’s stock prices dropped by 5%. A professor at Korea University Business School noted that this could represent Kakao’s most significant crisis, emphasizing that it is now up to the remaining leadership to demonstrate the company’s ability to function effectively in Kim’s absence.