The founder of South Korean tech giant Kakao Corp, Kim Beom Su, has been arrested on charges of stock manipulation during the takeover of SM Entertainment, a well-known K-Pop industry artist agency.
Prosecutors say the billionaire took part in manipulating SM Entertainment's stock price in February 2023 to make it harder for rival entertainment company Hybe to acquire them.
Cocoa Corp. accused of buying 240 billion won (US$173 million) worth of SM shares in 553 deals to inflate the stock price above 120,000 won per unit, the agreed-upon value Hybe offered SM to buy the shares from its investors . As the stock price soared, SM Entertainment rejected Hybe's offer. Kakao and Kakao Entertainment eventually bought a nearly 40 percent stake in SM last March, becoming its major shareholder.
The Seoul Southern District Court issued an arrest warrant for Kim on Tuesday, citing the risk of escape and destruction of evidence. The businessman categorically denies the accusations. According to the Yonhap news agency, he said during previous interviews that he had been informed of plans to buy SM shares, but not of the specific purchase procedures.
Kim, also known as Brian Kim, is considered a visionary of South Korea's digital technology industry. Founded in 2010, Kakao's portfolio includes a wide range of services, from online banking to taxis. Its KakaoTalk instant messaging app, with which the company launched, is now installed on 90 percent of phones in South Korea.
The Kakao conglomerate is also active in the entertainment industry, where it owns studios, agencies and record labels.
