A billionaire and tech entrepreneur from South Korea was arrested on Tuesday for allegedly causing a stock price manipulation involving a prominent K-pop agency during a deal last year.
Kim Beom-su, who is the founder of the tech firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant due to concerns that he might flee the country or tamper with evidence.
Kim denied the allegations, stating in a company meeting last week, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described his arrest as “unfortunate.”
The 58-year-old businessman faces accusations of manipulating the stock of SM Entertainment in connection with a takeover aimed at thwarting a rival company’s acquisition of the agency. SM Entertainment and Hybe represent two of South Korea’s largest K-Pop entities, showcasing artists such as Aespa and BTS.
Kakao eventually acquired SM Entertainment, while Kakao’s chief investment officer, Bae Jae-hyun, faced indictment for similar stock manipulation offenses last year.
Kim established Kakao in 2010, maintaining approximately 24% ownership of the company, which had over 10,000 employees as of 2020. He was once recognized as South Korea’s richest individual, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock fell by 5%. A business professor at Korea University suggested that this incident could be Kakao’s most significant challenge yet, expressing that it would now be up to the remaining leadership to demonstrate the company’s viability in the absence of its founder.