Kakao Founder Charged with Stock Manipulation
- The founder of Kakao is accused of attempting to inflate the share price of a company he intended to purchase.
- The allegations involve stock manipulation, raising concerns about transparency and ethics in business practices.
- This charge adds to the scrutiny of the company's leadership and its regulatory environment in South Korea.
South Korean technology mogul Kim Beom-su, also known as Brian Kim, has been indicted on charges of stock price manipulation related to his company, Kakao. The indictment follows allegations that Kim and other executives purchased significant amounts of shares in K-pop agency SM Entertainment to artificially inflate its stock price and thwart a competing takeover bid. Kim has been in detention since his arrest over two weeks ago, with Kakao asserting that he did not authorize any illegal activities. The Seoul Southern District Court has formally charged Kim with violating financial market regulations, with a trial date yet to be determined. The charges stem from a bidding war that occurred prior to Kakao acquiring a nearly 40% controlling stake in SM Entertainment in March of the previous year. Prosecutors claim that Kim orchestrated a four-day buying spree of SM shares to elevate their market valuation, thereby outpacing rival bidder Hybe, known for managing K-pop sensation BTS. This case has sent ripples through South Korea's technology sector, where Kim has been regarded as a pioneering figure. His indictment marks a significant moment, as he is the most prominent tech executive to face incarceration since Samsung's Lee Jae-yong was imprisoned for bribery in 2017. Kim's journey from modest beginnings to becoming a billionaire has resonated with many in a nation dominated by family-run conglomerates, or chaebols. Kakao, under Kim's leadership, has grown into one of South Korea's leading internet companies, operating the country's largest messaging app and expanding into various online sectors, including gaming and banking. However, a major outage in 2022 raised concerns about the nation's dependency on Kakao's services, highlighting the potential risks associated with its dominance in the tech landscape.