A billionaire and tech leader from South Korea was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant due to concerns that he might flee the country or destroy evidence.
Kim denied the allegations during a staff meeting at Kakao, asserting, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described his arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock prices of SM Entertainment during a takeover attempt last year, allegedly to thwart a competing bid by Hybe, another leading K-pop agency.
SM Entertainment and Hybe are two of South Korea’s largest K-pop companies, home to popular groups Aespa and BTS, respectively.
Kakao went on to successfully acquire SM Entertainment, and 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 is a major player in the tech industry, employing over 10,000 people by 2020. At one time, Kim was recognized as South Korea’s richest individual, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock dropped by 5%. Woochan Kim, a professor at Korea University Business School, suggested this could represent Kakao’s “biggest crisis,” commenting that it will now be up to the remaining leadership to prove the company can thrive without its founder.