A South Korean billionaire and tech entrepreneur was taken into custody 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 tech firm Kakao, has not yet faced formal charges. A Seoul Southern District Court granted an arrest warrant, citing concerns that he might flee the country or tamper with evidence.
In a company meeting, Kim stated, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
At 58 years old, Kim is accused of engaging in stock manipulation involving SM Entertainment to obstruct Hybe, another large K-pop agency, from taking over the company. SM Entertainment and Hybe are among the largest K-pop companies in South Korea, representing popular groups like Aespa and BTS.
Kakao eventually secured the acquisition of SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, also faced indictment on charges related to stock manipulation.
Founded in 2010 and based in Jeju City, Kakao is a significant player in the tech industry, employing over 10,000 people as of 2020. At one time, Kim was the wealthiest individual in South Korea, 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, remarked that this could represent Kakao’s “biggest crisis.” He emphasized the responsibility of those remaining in the company to demonstrate its ability to operate effectively without its founder.