A South Korean billionaire and technology leader was arrested on Tuesday for allegedly manipulating the stock price of a prominent K-pop agency during a takeover last year.
Kim Beom-su, the founder of the tech company Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court granted an arrest warrant for his detention amid concerns that he might flee the country or destroy evidence.
Kim, 58, has publicly denied the allegations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts,” during a recent staff meeting at Kakao. The company described the arrest as “unfortunate.”
He is accused of influencing the stock of SM Entertainment during a takeover attempt to hinder Hybe, another leading K-pop agency, from acquiring it. SM Entertainment and Hybe are among South Korea’s largest K-pop firms, managing popular groups like Aespa and BTS.
Kakao ultimately completed the acquisition of SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, faced similar charges of stock manipulation.
Founded in 2010 and based in Jeju City, Kakao employs over 10,000 people and Kim holds approximately a 24% stake in the company. At one time, he was recognized as South Korea’s wealthiest individual, with a 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 could be Kakao’s most significant crisis to date, emphasizing the importance for the remaining team to demonstrate the company’s stability in Kim’s absence.