A South Korean billionaire and technology entrepreneur was arrested on Tuesday for allegedly manipulating the stock price of a major K-pop agency during a transaction last year.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged, as reported by the New York Times. The Seoul Southern District Court issued an arrest warrant for his detention, expressing concerns that he might flee the country or destroy evidence.
“The allegations are not true. I have never instructed or condoned any illegal acts,” Kim stated during a staff meeting at Kakao last week. The company described the arrest as “unfortunate.”
At 58 years old, Kim faces accusations of manipulating the stock of SM Entertainment during a takeover bid last year in an effort to thwart rival agency Hybe from acquiring it.
SM Entertainment and Hybe are two leading K-pop companies in South Korea, representing popular groups Aespa and BTS, respectively.
Ultimately, Kakao completed the acquisition of SM Entertainment. Additionally, last year, Kakao’s chief investment officer, Bae Jae-hyun, was indicted on charges of stock manipulation.
Kim founded Kakao in 2010, and as of 2020, the company, headquartered in Jeju City, employed over 10,000 individuals. Kim once held the title of South Korea’s richest person, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock declined by 5% on Tuesday.
Woochan Kim, a professor at Korea University Business School, indicated that this situation might represent Kakao’s most significant crisis. “It would be the job of those who remain at the company to show that it can run well even with the founder not around,” he commented.