A South Korean billionaire and tech mogul was arrested Tuesday for allegedly manipulating the stock price of a major K-pop agency during a deal last year.
Kim Beom-su, who founded Kakao, was arrested but has not been charged with a crime
A South Korean billionaire and tech mogul was arrested Tuesday for allegedly manipulating the stock price of a major K-pop agency during a deal last year.
Kim Beom-su, who founded the technology company Kakao, has not been formally charged, the New York Times reported. The Seoul Southern District Court issued an arrest warrant for him to be brought into custody, with prosecutors fearing he might leave the country or bury evidence.
“The allegations are not true. I have never instructed or condoned any illegal acts,” Kim said in a staff meeting at Kakao last week, the Times reported. The company called the arrest “unfortunate.”
Kim, 58, is accused of manipulating the stock of SM Entertainment during a takeover last year as part of a scheme to prevent Hybe, another major K-pop agency, from acquiring it.
SM Entertainment and Hybe are two of the country’s biggest K-Pop companies, representing Aespa and BTS respectively.
Kakao ultimately acquired SM Entertainment. Last year, Kakao’s chief investment officer Bae Jae-hyun was also indicted on stock manipulation charges.
Kim founded the company, headquartered in Jeju City, in 2010. The company, which Kim maintains about a 24% stake in, employed more than 10,000 people in 2020. He was at one point South Korea’s richest person, with an estimated net worth of more than $13 billion.
Kakao stock was down 5% on Tuesday following news of his arrest.
Woochan Kim, a professor at Korea University Business School, told the Times this might be Kakao’s “biggest 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 said.
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