A South Korean billionaire and technology entrepreneur has been arrested 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 company Kakao, has not yet been formally charged, according to reports. The Seoul Southern District Court issued an arrest warrant for him amidst concerns that he might flee the country or destroy evidence.
In a recent staff meeting at Kakao, Kim asserted, “The allegations are not true. I have never instructed or condoned any illegal acts.” Kakao referred to the arrest as “unfortunate.”
The 58-year-old businessman is accused of manipulating the stock of SM Entertainment during a takeover attempt last year to thwart a bid by Hybe, another major K-pop agency. SM Entertainment and Hybe represent two of South Korea’s largest K-Pop companies, with Aespa and BTS, respectively.
Kakao eventually completed the acquisition of SM Entertainment. Last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted on similar stock manipulation charges.
Founded in 2010 and headquartered in Jeju City, Kakao employs over 10,000 people and Kim holds about a 24% stake in the firm. At one point, he was the wealthiest individual in South Korea, with an estimated net worth exceeding $13 billion.
Following the news of his arrest, Kakao’s stock dropped by 5%. A professor at Korea University Business School commented that this could represent Kakao’s “biggest crisis,” emphasizing the need for remaining team members to prove the company’s viability without its founder.