A prominent South Korean tech mogul and billionaire has been arrested on allegations of manipulating the stock price of a leading K-pop agency during a deal last year.
Kim Beom-su, the founder of the technology giant Kakao, has not yet been formally charged. The Seoul Southern District Court has issued an arrest warrant to ensure his custody, as prosecutors express concerns about the possibility of him fleeing the country or destroying evidence.
In a recent staff meeting, Kim firmly denied the accusations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
At 58 years old, Kim is accused of stock manipulation involving SM Entertainment amid a takeover attempt last year, aiming to thwart rival K-pop agency Hybe from acquiring the company.
SM Entertainment and Hybe are major players in the South Korean music industry, representing popular groups like Aespa and BTS.
Kakao ultimately succeeded in acquiring SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, also faced indictment on related stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao, in which Kim holds approximately a 24% stake, employed over 10,000 individuals in 2020. At one point, Kim was recognized as South Korea’s richest individual, with a net worth exceeding $13 billion.
Following the arrest news, Kakao’s stock fell by 5% on Tuesday. Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis,” emphasizing the necessity for the remaining leadership in the company to demonstrate effective management in Kim’s absence.