A South Korean billionaire and tech executive was taken into custody 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 giant Kakao, has not yet been formally charged, according to reports. An arrest warrant was issued by the Seoul Southern District Court amid concerns that he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim stated, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
At 58 years old, Kim faces accusations of manipulating the stock of SM Entertainment during a takeover attempt last year, aimed at thwarting rival K-pop agency Hybe from acquiring the firm.
SM Entertainment and Hybe are two of South Korea’s largest K-pop companies, representing popular groups Aespa and BTS, respectively.
Kakao eventually acquired SM Entertainment, and last year, the company’s chief investment officer, Bae Jae-hyun, was also indicted on charges of stock manipulation.
Kim, who founded Kakao in 2010 and holds approximately a 24% stake in the company, saw it grow to employ over 10,000 people by 2020. He was once recognized as South Korea’s richest individual, with an estimated 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 represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company’s resilience in Kim’s absence.