A South Korean billionaire and tech entrepreneur was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet faced formal charges, according to reports. The Seoul Southern District Court has issued an arrest warrant to ensure his custody, as prosecutors expressed concerns that he might flee the country or tamper with evidence.
Kim asserted his innocence during a recent staff meeting, stating, “The allegations are not true. 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 during last year’s takeover attempt, allegedly to obstruct its acquisition by Hybe, another prominent K-pop agency.
SM Entertainment and Hybe are among the largest K-Pop firms in South Korea, managing notable groups like Aespa and BTS, respectively.
Ultimately, Kakao succeeded in acquiring SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, was also indicted on charges of stock manipulation.
Founded in 2010 and based in Jeju City, Kakao has seen Kim hold approximately a 24% stake in the company, which employed over 10,000 individuals in 2020. At one time, he was recognized as South Korea’s wealthiest person, with an estimated net worth exceeding $13 billion.
In response to the arrest, Kakao’s stock price fell by 5% on Tuesday. Woochan Kim, a professor at Korea University Business School, remarked that this situation could represent Kakao’s “biggest crisis,” emphasizing the need for the company’s remaining leadership to demonstrate its capability to operate effectively without the founder.