Kim Beom-su, the founder and chairman of Kakao Corp, one of South Korea’s largest tech companies, has been arrested over allegations of manipulating stock prices in relation to a deal involving a popular K-pop entertainment agency.
Kim Beom-su, who is also known as Brian Kim, was taken into custody by South Korean authorities after an investigation into Kakao’s acquisition of a majority stake in Loen Entertainment, a major player in the K-pop industry. The deal, which was valued at over $1 billion, was completed in 2016.
Authorities allege that Kim and other Kakao executives engaged in insider trading and other illegal activities to manipulate the stock price of Kakao ahead of the acquisition of Loen Entertainment. This allowed them to profit personally from the deal, while also benefiting Kakao as a company.
The arrest of Kim Beom-su has sent shockwaves through South Korea’s tech industry, as Kakao is one of the country’s most successful and well-known companies. The company, which started as a messaging app in 2010, has since expanded into various other sectors, including gaming, fintech, and content creation.
Kakao’s involvement in the K-pop industry has been a major part of its growth strategy, as the global popularity of K-pop has continued to rise in recent years. The acquisition of Loen Entertainment, which is home to popular K-pop groups such as IU and Fiestar, was seen as a strategic move to capitalize on this trend.
However, the allegations against Kim Beom-su and Kakao have raised questions about the company’s ethics and corporate governance. In a statement, Kakao said it would fully cooperate with the investigation and take appropriate action if any wrongdoing is found.
The arrest of Kim Beom-su is just the latest in a series of high-profile scandals involving South Korea’s tech industry. In recent years, several other prominent executives and companies have been implicated in corruption and fraud cases, leading to calls for greater transparency and accountability in the sector.
As the investigation into Kakao and Kim Beom-su unfolds, it remains to be seen what impact this will have on the company’s future and reputation. The tech giant, which is a key player in South Korea’s economy, will need to address these allegations swiftly and decisively in order to regain the trust of investors and consumers.