A South Korean billionaire and tech entrepreneur has been arrested on allegations of stock price manipulation related to a major K-pop agency. Kim Beom-su, the founder of Kakao, was taken into custody after the Seoul Southern District Court issued an arrest warrant based on concerns that he might flee the country or destroy evidence.
According to reports, Kim has not yet been formally charged. In a recent staff meeting, he denied the accusations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
Kim, 58, is accused of manipulating the stock of SM Entertainment as part of a strategy to hinder Hybe, another prominent K-pop agency, from acquiring it. SM Entertainment and Hybe represent two of South Korea’s leading K-pop groups, Aespa and BTS, respectively. Ultimately, Kakao succeeded in acquiring SM Entertainment, while last year, Kakao’s chief investment officer was indicted on similar stock manipulation charges.
Kakao, which Kim established in 2010, employs over 10,000 people and had an estimated market capitalization that placed him among South Korea’s wealthiest individuals, with a net worth exceeding $13 billion. Following the news of Kim’s arrest, Kakao’s stock dropped by 5%. Experts suggest this could mark a significant crisis for the company, emphasizing the need for Kaka’s remaining leadership to ensure stability in Kim’s absence.