A South Korean billionaire and tech mogul was arrested on Tuesday for allegedly manipulating the stock price of a major K-pop agency during a deal last year.
Kim Beom-su, the founder of the technology company Kakao, has not been formally charged, according to the New York Times. The Seoul Southern District Court issued an arrest warrant for him, citing concerns he might flee the country or destroy evidence.
“The allegations are not true. I have never instructed or condoned any illegal acts,” Kim said in a staff meeting at Kakao last week, the Times reported. Kakao described the arrest as “unfortunate.”
Kim, 58, is accused of manipulating the stock of SM Entertainment during a takeover last year to prevent Hybe, another major K-pop agency, from acquiring it. SM Entertainment and Hybe are two of South Korea’s biggest K-pop companies, representing Aespa and BTS respectively.
Eventually, Kakao acquired SM Entertainment. Last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted on stock manipulation charges.
Kim founded Kakao, headquartered in Jeju City, in 2010. He holds about a 24% stake in the company, which employed more than 10,000 people in 2020. He was once South Korea’s richest person, with an estimated net worth of over $13 billion.
Kakao stock fell 5% on Tuesday following news of his arrest. Woochan Kim, a professor at Korea University Business School, told the Times this might be Kakao’s “biggest crisis.”
“It will be up to those who remain at the company to demonstrate it can function well even without its founder,” he said.