A South Korean billionaire and technology entrepreneur was apprehended 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 been formally charged, according to reports. The Seoul Southern District Court has issued an arrest warrant for him, as prosecutors are concerned he may flee the country or destroy evidence.
Kim asserted in a recent company gathering that the allegations are false. “I have never instructed or condoned any illegal acts,” he stated. Kakao described the arrest as “unfortunate.”
The 58-year-old is accused of manipulating the stock of SM Entertainment in a bid to thwart Hybe, another leading K-pop agency, from acquiring it as part of a takeover last year.
SM Entertainment and Hybe are two of South Korea’s largest K-Pop companies, representing popular groups Aespa and BTS, respectively.
Eventually, Kakao did acquire SM Entertainment. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was also charged with stock manipulation.
Kim established Kakao in 2010 and holds roughly a 24% share in the company, which employed over 10,000 individuals in 2020. He has previously been regarded as South Korea’s wealthiest person, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock dropped by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, suggested that this could be Kakao’s “biggest crisis.” He emphasized the responsibility of remaining company leaders to prove that the business can operate effectively even in the absence of its founder.