A South Korean billionaire and tech entrepreneur, Kim Beom-su, was arrested on Tuesday on accusations of stock price manipulation involving a prominent K-pop agency during a transaction last year.
The founder of Kakao, a major technology firm, has not faced formal charges yet. The Seoul Southern District Court issued an arrest warrant due to concerns that he might flee the country or destroy evidence. Kim denied the allegations, stating, “The allegations are not true. I have never instructed or condoned any illegal acts,” during a recent meeting at Kakao. The company expressed that the arrest is “unfortunate.”
Kim, who is 58 years old, is accused of manipulating the stock of SM Entertainment as part of a strategy to thwart Hybe, another leading K-pop agency, from acquiring the company. SM Entertainment and Hybe are among South Korea’s largest K-pop entities, representing popular groups Aespa and BTS, respectively.
Kakao successfully acquired SM Entertainment. This incident follows the indictment of Kakao’s chief investment officer, Bae Jae-hyun, on similar stock manipulation charges last year.
Kim established Kakao in 2010, and as of 2020, the firm employed over 10,000 workers, with Kim owning roughly 24% of it. At one point, he was the richest person in South Korea, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock declined by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis,” emphasizing the need for the company’s remaining leaders to demonstrate stability without the founder’s presence.