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Korean Prosecutors Arrest Kakao Corp. Chief Over SM Entertainment Takeover Allegations

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variety.com
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Patrick Frater Asia Bureau Chief South Korean prosecutors said that they had arrested Kim Beom-su, the billionaire founder of tech giant Kakao, over alleged stock price manipulation.

The case relates to the company’s takeover of K-pop agency SM Entertainment last year. “Kim faces allegations that he orchestrated and approved schemes to collaborate with the operator of a private equity fund to deliberately inflate the stock price of SM Entertainment to prevent Hybe Corp.

from buying SM Entertainment,” according to AP News. Hybe Corp., the powerhouse agency behind BTS, attempted to buy a 15% share stake in SM Entertainment that were being sold by its estranged founder Lee Soo-man.

But Hybe was thwarted by resistance from SM Entertainment’s management and by a richer bid from Kakao and its allies. Kim (also known as Brian Kim) has denied the allegations, according to the Seoul prosecutors’ office, which also said that another Kakao executive and the head of an equity fund have already been indicted in the same case.

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