A South Korean billionaire and tech entrepreneur was taken into custody on Tuesday following allegations of stock price manipulation related to a leading K-pop agency during a previous deal.
Kim Beom-su, the founder of the technology firm Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court has issued a warrant for his arrest due to concerns that he might flee the country or destroy evidence.
Kim, 58, has denied the accusations, stating during a Kakao staff meeting last week, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao described the arrest as “unfortunate.”
He is accused of influencing the stock of SM Entertainment in a bid to hinder rival Hybe from acquiring the company during a takeover last year. SM Entertainment and Hybe are two of the largest K-pop companies in the country, representing popular groups Aespa and BTS, respectively.
Kakao eventually completed the acquisition of SM Entertainment. Last year, Bae Jae-hyun, Kakao’s chief investment officer, was also indicted on charges of stock manipulation.
Kim founded Kakao, based in Jeju City, in 2010. He holds approximately 24% of the company’s shares and employed over 10,000 people in 2020. At one point, he was regarded as South Korea’s wealthiest individual, with a net worth exceeding $13 billion.
Following the announcement of his arrest, Kakao’s stock price fell by 5%. Woochan Kim, a professor at Korea University Business School, remarked that this could represent Kakao’s “biggest crisis,” emphasizing that remaining executives need to demonstrate the company’s operational stability without its founder.