A South Korean billionaire and technology 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, according to reports. The Seoul Southern District Court issued an arrest warrant amid 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 in a staff meeting at Kakao last week. The company described the arrest as “unfortunate.”
At 58 years old, Kim is accused of manipulating the stock of SM Entertainment in order to thwart another major K-pop agency, Hybe, from taking over the company.
SM Entertainment and Hybe are among the largest K-pop companies in South Korea, representing popular groups such as Aespa and BTS, respectively.
Kakao eventually succeeded in acquiring SM Entertainment, and last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on stock manipulation charges.
Kim launched Kakao in 2010, and the company, based in Jeju City, had over 10,000 employees by 2020. At one time, he was the richest person in South Korea, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, suggested that this incident could represent Kakao’s “biggest crisis.”
“It will be up to those who remain at the company to demonstrate that it can operate effectively without the founder’s presence,” he remarked.