South Korean tech billionaire arrested for stock manipulation at K-pop company

According to Yonhap news agency, the Seoul Southern District Court issued the arrest warrant against Kim after a hearing in which it concluded that he posed a flight risk and might destroy evidence.

In a press statement last week, Kakao said Kim informed the company in a meeting that the allegations were untrue and that he had “never ordered or condoned any illegal acts.”

The case against Kim is related to his company Kakao’s majority stake in the K-pop label and management company SM Entertainment. The company acquired the stake last year in a bidding war against Hybe, the parent company of BigHit, which manages BTS.

Kim and other Kakao executives were accused of artificially inflating SM Entertainment’s share price above $86.50 (KRW 120,000) – the set price at which Hybe bought shares from the label’s investors, Yonhap reported.

The South Korean technology giant is said to have bought around $173 million (KRW 240 billion) worth of SM shares at artificially inflated prices in order to thwart Hybe’s takeover attempt.

Kakao shares fell 5.12% to $28.11 (KRW 38,950) in late afternoon trading in Korea on Tuesday.