A South Korean billionaire and tech entrepreneur was arrested on Tuesday for allegedly 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, as reported by the New York Times. The Seoul Southern District Court issued an arrest warrant to ensure his custody, citing concerns that he may flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts,” Kim stated during a company meeting at Kakao last week, emphasizing that the claims against him are untrue. Kakao described the arrest as “unfortunate.”
The 58-year-old is accused of altering the stock dynamics of SM Entertainment during an attempt to prevent competitor Hybe, another leading K-pop agency, from taking over the company.
SM Entertainment and Hybe are among South Korea’s largest K-Pop companies, representing popular groups like Aespa and BTS.
Kakao ultimately acquired SM Entertainment, and last year, the company’s chief investment officer Bae Jae-hyun was also indicted on charges of stock manipulation.
Founded in 2010 and headquartered in Jeju City, Kakao is a major player in the tech sector, with Kim owning approximately 24% of its shares. By 2020, the company had over 10,000 employees, 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, remarked that this could be Kakao’s “biggest crisis,” stressing the need for the remaining leadership to demonstrate the company’s viability in Kim’s absence.