A South Korean billionaire and tech entrepreneur was arrested on Tuesday for reportedly 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 been formally charged. A Seoul Southern District Court issued an arrest warrant for him due to concerns that he might flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts,” Kim stated at a recent staff meeting at Kakao, describing the allegations as false. The company expressed its disappointment over the arrest.
The 58-year-old is accused of manipulating the shares of SM Entertainment amid a takeover bid last year, allegedly as part of a plot to thwart another major K-pop agency, Hybe, from acquiring the company.
Both SM Entertainment and Hybe rank among South Korea’s largest K-pop firms, known for managing popular acts such as Aespa and BTS, respectively.
Kakao eventually completed the acquisition of SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, was also indicted on similar stock manipulation charges.
Established in 2010 and headquartered in Jeju City, Kakao is a major player in the tech industry, with Kim owning about a 24% share in the company, which employed over 10,000 people in 2020. He was once considered the wealthiest person in South Korea, boasting an estimated net worth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, suggested that this could be Kakao’s “biggest crisis.”
“It will be essential for those who remain at the company to demonstrate that it can function effectively without the founder,” he commented.