A South Korean billionaire and tech leader was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a deal last year.
Kim Beom-su, founder of the technology firm Kakao, has not yet been formally charged. The Seoul Southern District Court issued an arrest warrant to ensure his custody, amid concerns from prosecutors that he may flee the country or destroy evidence.
Kim publicly asserted his innocence, stating during a Kakao staff meeting last week, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment as part of a strategy to thwart rival Hybe from acquiring the company. SM Entertainment and Hybe are among the largest K-pop firms in South Korea, representing high-profile groups such as Aespa and BTS.
Kakao successfully acquired SM Entertainment, but in a separate case last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on charges of stock manipulation.
Founded in 2010 and headquartered in Jeju City, Kakao employs over 10,000 individuals and has seen Kim, at one point, ranked as South Korea’s richest person, with a 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, commented that this incident could represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company’s stability in Kim’s absence.