South Korean authorities have issued an arrest warrant for Kakao founder Brian Kim over allegations of market manipulation, setting the stage for him to become the most prominent business figure in the country to wind up in jail in years.
The Seoul Southern District Court issued a warrant for the arrest of the 58-year-old internet entrepreneur, citing ¡°concerns of evidence destruction and flight.¡±
Kim, celebrated for creating a messaging and social-media platform that linked online services from banking to webtoons, is facing accusations that he was involved in a stock-rigging scheme during the high-profile takeover of SM Entertainment in 2023.
Kakao won a controlling stake in SM after an intense bidding battle with Hybe, the label behind boyband sensation BTS.
Financial regulators have since accused executives at Kakao and unit Kakao Entertainment of buying 240 billion won ($173 million) in shares of SM at the time, to disrupt Hybe¡¯s offer.
Kim and Kakao spokespeople have repeatedly denied the allegations and said no illegal activities transpired during the acquisition of SM.
A spokesperson for Kakao declined to comment on the arrest warrant on Monday.
The warrant is a remarkable turn of events for a self-made billionaire who rose from poverty to build Korea¡¯s leading internet firm.
Kim founded the company that would become Kakao in 2006 and started the massively successful KakaoTalk mobile messaging app four years later.
He then expanded into a plethora of services including online banking, shopping, gaming and ride-hailing.
Kakao currently ranks as the country¡¯s 15th largest conglomerate by assets, with 124 affiliates, according to data from the Fair Trade Commission and the company.
That rapid expansion drew regulatory scrutiny and criticism that the company was hurting mom-and-pop stores.
In March, Shina Chung, the former head of its corporate venture-capital arm, became chief executive officer to lead the firm out of crisis.
Its shares have shed some three-quarters of their value since a 2021 lifetime high.
Korean authorities have for decades convicted and imprisoned corporate leaders over allegations of graft or other wrongdoing ¡ª most recently Jay Y. Lee, now chair of memory chip and smartphone maker Samsung Electronics.
Kim, however, is the first of a new breed of tech entrepreneurs to run afoul of the law.
South Korean authorities had previously arrested Kakao¡¯s chief investment officer, Bae Jae-hyun, over alleged stock-price manipulation connected to the high-profile bidding war for K-pop agency SM Entertainment.
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