A South Korean billionaire and technology entrepreneur was taken into custody on Tuesday over allegations of stock manipulation concerning a prominent K-pop agency during a transaction last year.
Kim Beom-su, the founder of Kakao, has not yet faced formal charges, according to reports. The Seoul Southern District Court issued a warrant for his arrest due to concerns that he might flee the country or destroy evidence related to the case.
Kim has publicly denied the allegations, asserting in a recent staff meeting at Kakao that he has never engaged in or endorsed any illegal activities. The company described the arrest as “unfortunate.”
At 58 years old, Kim is accused of manipulating stock related to SM Entertainment during last year’s takeover aimed at thwarting rival Hybe’s attempts to acquire the agency.
SM Entertainment and Hybe are two of South Korea’s leading K-pop companies, representing popular groups Aespa and BTS, respectively. Kakao ultimately succeeded in acquiring SM Entertainment. Previously, Kakao’s chief investment officer, Bae Jae-hyun, also faced indictment on related stock manipulation charges.
Founded in 2010 and headquartered in Jeju City, Kakao is a significant player in the tech industry, with Kim holding approximately a 24% stake. The company employed over 10,000 people in 2020, and Kim was at one time regarded as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5%. A business expert from Korea University observed that this situation could represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company’s viability in Kim’s absence.