A South Korean billionaire and tech entrepreneur was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency in connection with a deal from the previous 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 approved an arrest warrant for him, as prosecutors expressed concerns that he might flee the country or tamper with evidence.
“I have never instructed or condoned any illegal acts,” Kim stated during a staff meeting at Kakao prior to his arrest. The company described the incident as “unfortunate.”
The 58-year-old entrepreneur is accused of manipulating the stock of SM Entertainment during a takeover attempt last year, allegedly to thwart Hybe—a rival K-pop agency—from acquiring the company.
SM Entertainment and Hybe are two of South Korea’s largest K-pop firms, representing 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 on stock manipulation charges.
Founded in 2010 and headquartered in Jeju City, Kakao is a major player in South Korea’s tech industry, with Kim holding a roughly 24% stake in the company, which employed over 10,000 people as of 2020. At one point, he was the country’s richest individual, with a net worth exceeding $13 billion.
Following news of Kim’s arrest, Kakao’s stock dropped by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis,” suggesting that it is now up to the remaining leadership to demonstrate the company’s resilience in Kim’s absence.