South Korean Billionaire Brian Kim Faces Arrest Warrant Over Alleged K-Pop Market Manipulation

South Korean authorities have issued an arrest warrant for Brian Kim, the founder of Kakao Corp., over allegations of violating capital market laws. This could potentially lead to Kim becoming the most prominent business figure in the country to face imprisonment in recent years.

What Happened: The Seoul Southern District Court has issued an arrest warrant for Kim, a 58-year-old internet entrepreneur, for his alleged involvement in a stock-rigging scheme during the high-profile takeover of SM Entertainment Co. in 2023, reported Bloomberg.

Following a fierce bidding war with Hybe Co., the label behind the popular boyband BTS, a prominent example of a K-pop group, Kakao secured a controlling stake in SM. However, financial regulators have accused Kakao executives, including those from its unit Kakao Entertainment Corp., of purchasing 240 billion won ($173 million) in SM shares to disrupt Hybe’s offer.

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Kim and Kakao have consistently refuted these allegations, asserting that no illegal activities occurred during the acquisition of SM.

Why It Matters: This development marks a significant shift for Kim, a self-made billionaire who rose from poverty to establish South Korea’s leading internet firm. Kakao, founded in 2006, has grown to become the country’s 15th largest conglomerate by assets, with 124 affiliates.

The company’s rapid expansion has drawn regulatory scrutiny and criticism for potentially harming small businesses. In March, Shina Chung, the former head of Kakao’s corporate venture capital arm, was appointed as the CEO to steer the firm out of its crisis. Since reaching a lifetime high in 2021, Kakao’s shares have plummeted by approximately three-quarters.

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Image Via Unsplash

This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote