A South Korean billionaire and tech 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 authorized the arrest warrant citing concerns that he may attempt to flee the country or destroy evidence.
Kim has denied the allegations, stating during a company meeting that he has never engaged in or supported any illegal actions. Kakao described the arrest as “unfortunate.”
The 58-year-old is accused of influencing the stock of SM Entertainment amid a takeover attempt last year, aimed at hindering competitor Hybe, which represents major K-pop acts such as BTS.
Kakao eventually acquired SM Entertainment, and previously, Kakao’s chief investment officer was indicted on similar stock manipulation charges.
Kim established Kakao, based in Jeju City, in 2010 and owned around a 24% stake in the company, which employed over 10,000 individuals in 2020. At one point, he was considered South Korea’s richest individual, with an estimated wealth exceeding $13 billion.
Following the news of Kim’s arrest, Kakao’s stock fell by 5%. A business professor noted that this situation could represent Kakao’s “biggest crisis,” emphasizing the need for the remaining leadership to demonstrate the company can operate successfully without its founder.