A South Korean billionaire and prominent tech entrepreneur was detained on Tuesday for reportedly manipulating the stock price of a leading K-pop agency during a takeover attempt 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 has issued an arrest warrant for him due to concerns that he might flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts. The allegations are not true,” Kim stated during a recent staff meeting at Kakao. The company deemed the arrest “unfortunate.”
The 58-year-old is purportedly accused of trying to manipulate the stock of SM Entertainment to thwart another major K-pop agency, Hybe, from acquiring it. SM Entertainment and Hybe are two of South Korea’s largest K-pop firms, representing the popular groups Aespa and BTS, respectively.
Kakao ultimately acquired SM Entertainment, and last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted for charges related to stock manipulation.
Kim started Kakao, which is based in Jeju City, in 2010. He held around a 24% stake in the company, which had more than 10,000 employees as of 2020. At one point, he was recognized as South Korea’s richest individual, with a net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock fell by 5%. A professor from Korea University Business School commented that this situation might represent Kakao’s “biggest crisis,” emphasizing that it will be crucial for those remaining at the company to demonstrate its capability to function effectively in the founder’s absence.