A South Korean billionaire and tech entrepreneur was arrested on Tuesday for allegedly manipulating stock prices of a prominent K-pop agency during a deal last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged, according to reports. An arrest warrant was issued by the Seoul Southern District Court to ensure his custody, as prosecutors are concerned he might flee the country or destroy evidence.
“I have never instructed or condoned any illegal acts,” Kim stated during a recent staff meeting at Kakao. The company expressed that the arrest was “unfortunate.”
The 58-year-old businessman is accused of tampering with the stock of SM Entertainment during a takeover attempt last year, allegedly orchestrating the situation to hinder Hybe, another major K-pop agency, from acquiring the company.
Both SM Entertainment and Hybe are leading forces in the South Korean K-pop scene, representing successful groups like Aespa and BTS, respectively. Ultimately, Kakao managed to acquire SM Entertainment, but last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted on charges related to stock manipulation.
Kim founded Kakao in 2010, and he held around a 24% stake in the company, which employed over 10,000 people as of 2020. He was once recognized as South Korea’s wealthiest individual, boasting an estimated net worth exceeding $13 billion.
Following his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, suggested that this could mark the most significant crisis for Kakao. He emphasized that it is now up to the remaining leadership to demonstrate that the company can operate effectively without its founder.