Kim Beom-su, founder of South Korean communications giant Kakao Corp and one of the country’s richest men, has been indicted by the Seoul Southern District prosecutors’ office on alleged stock manipulation charges.
It’s the latest development in a corporate scandal that has engrossed Korea’s influential entertainment industry, not least because of the involvement of Hybe, the manager of superstar Korean boy band BTS.
At the centre of the intrigue lies K-pop powerhouse SM Entertainment, the agency behind supergroup SuperM.
Both Kakao Corp and Hype sought to acquire controlling stakes in SM Entertainment to expand their K-pop empires, with the latter initially tabling a 12,000 Korean won per share.
Hybe dropped its bid in March 2023, allowing Kakao to swoop in with a 15,000 won tender offer that same month.
Kakao became SM Entertainment’s controlling shareholder with a nearly 40% stake, But Kim is now accused of artificially pumping SM Entertainment’s valuation by purchasing shares above Hybe’s offer price on 553 occasions, per Yonhap News reports.
He was arrested in July on accusations of alleged market manipulation involving some $80 million of share purchases in February 2023.
Kim denies the allegations. “I believe the truth will eventually be revealed, because I have never instructed or condoned any illegal acts,” Kim reportedly told affiliates in July.
Kakao is now under emergency management following its founder’s arrest, with Chung Shin-a stepping in as chief executive.
The company is currently valued at approximately $12 billion, though its share price is down by a third year to date.