A South Korean billionaire and tech leader was arrested on Tuesday on allegations of manipulating the stock price of a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of the tech firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court has issued an arrest warrant for him amid concerns from prosecutors that he might flee the country or destroy evidence.
Kim asserted that the allegations are false, stating, “I have never instructed or condoned any illegal acts,” during a recent staff meeting at Kakao. The company described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment in an effort to prevent rival K-pop agency Hybe from acquiring it during a takeover last year. SM Entertainment and Hybe are among the largest K-Pop firms in the country, representing groups like Aespa and BTS.
Kakao eventually acquired SM Entertainment, and last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on charges related to stock manipulation.
Founded in 2010 and headquartered in Jeju City, Kakao is a major player in the tech industry, with Kim owning approximately a 24% stake. The company employed over 10,000 people as of 2020, and Kim was once the richest person in South Korea, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, indicated that this situation might represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company can continue to thrive without its founder.