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 corporate takeover last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged. A Seoul Southern District Court has issued an arrest warrant for him due to concerns that he might flee the country or destroy evidence related to the case.
“I have never instructed or approved any illegal activities; these allegations are not true,” Kim stated in a staff meeting at Kakao last week. The company described his arrest as “unfortunate.”
Kim, age 58, is accused of manipulating the stock of SM Entertainment to thwart the acquisition attempts by Hybe, another significant K-pop agency.
SM Entertainment and Hybe are among the largest K-pop firms in the nation, representing Aespa and BTS, respectively.
Ultimately, Kakao completed the acquisition of SM Entertainment. Additionally, last year, Kakao’s chief investment officer, Bae Jae-hyun, was indicted on charges of stock manipulation.
Kim established Kakao in Jeju City in 2010 and held approximately a 24% stake in the company, which employed over 10,000 workers in 2020. At one point, he was the richest person in South Korea, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, commented that this could be Kakao’s “biggest crisis,” emphasizing that it will be crucial for the remaining leadership to demonstrate that the company can thrive even in the absence of its founder.