A prominent South Korean billionaire and tech entrepreneur, Kim Beom-su, has been arrested on accusations of manipulating stock prices at a leading K-pop agency during a deal last year. Kim, the founder of the technology firm Kakao, has not yet been formally charged. The Seoul Southern District Court authorized the arrest due to concerns that he might attempt to flee the country or destroy evidence.
In a recent meeting with Kakao staff, Kim denied the allegations, asserting, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
Kim, who is 58 years old, is alleged to have influenced the stock of SM Entertainment during a takeover attempt last year, aiming to thwart its acquisition by Hybe, another leading K-pop agency.
Kakao went on to successfully acquire SM Entertainment, which, along with Hybe, represents some of the biggest names in the K-pop industry, including Aespa and BTS. Last year, Kakao’s chief investment officer, Bae Jae-hyun, was indicted for stock manipulation as well.
Founded in 2010 and headquartered in Jeju City, Kakao is a major player in South Korea, with Kim holding approximately a 24% stake in the company. In 2020, Kakao employed over 10,000 people and Kim was once regarded as the richest individual in South Korea, with a net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock price fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could be Kakao’s “biggest crisis,” indicating that company leaders will need to demonstrate effective management in Kim’s absence.