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 deal last year.
Kim Beom-su, the founder of the tech company Kakao, has not been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him amid concerns that he could flee the country or destroy evidence.
Kim, 58, denied the allegations, stating at a Kakao staff meeting, “The allegations are not true. I have never instructed or condoned any illegal acts.” The company described the arrest as “unfortunate.”
He is accused of manipulating the stock of SM Entertainment during a takeover attempt last year to thwart Hybe, another major player in the K-pop industry, from acquiring it. Both SM Entertainment and Hybe are among the largest K-Pop companies in South Korea, with SM representing groups like Aespa and Hybe representing BTS.
Ultimately, Kakao acquired SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also indicted on stock manipulation charges.
Founded in 2010 and based in Jeju City, Kakao had over 10,000 employees as of 2020, with Kim holding approximately a 24% stake in the company. At one time, he was considered South Korea’s richest individual, with a net worth exceeding $13 billion.
Following news of his arrest, Kakao’s stock fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis,” emphasizing the necessity for those remaining in the company to demonstrate its capability to operate successfully without its founder.