South Korean technology tycoon Kim Beom-su, also known as Brian Kim, has been indicted on charges of stock price manipulation. Kim, the founder of Kakao, is accused of orchestrating a scheme to inflate the stock price of K-pop agency SM Entertainment in order to undermine a rival bid for the company.
According to the Seoul Southern District Prosecutors’ Office, Kim and other Kakao executives engaged in a substantial buying spree of SM Entertainment shares. This move reportedly aimed to boost the stock market valuation of SM Entertainment, thus making it more difficult for competitor Hybe—known for managing K-pop superstars BTS—to acquire the company. Kim has been in detention since his arrest over two weeks ago.
In response to the allegations, Kakao has stated that Kim neither ordered nor condoned any illegal activities. The company maintains that Kim adhered to financial market regulations. The trial date for Kim’s case has yet to be determined, according to local reports.
The indictment is linked to Kakao’s attempt to acquire a significant stake in SM Entertainment—nearly 40%—which it successfully secured in March of the previous year. Prosecutors allege that Kim’s actions were part of a deliberate strategy to sway the bidding war in Kakao’s favor.
This case has caused a stir in South Korea’s technology sector, where Kim has been recognized as a pioneering figure. He is the most prominent tech executive to face incarceration in South Korea since Samsung Electronics chairman Lee Jae-yong was sentenced to 18 months in prison in 2017 for bribery.
Kim’s rise from modest beginnings to becoming a billionaire has endeared him to many in South Korea, where a few large family-run conglomerates, or chaebols, dominate the economy. As the founder of Kakao, Kim is credited with transforming the company into one of South Korea’s leading internet businesses. Kakao operates the country’s largest messaging app and has expanded into gaming, shopping, and banking.
In 2022, Kakao faced criticism when a fire damaged its servers, causing a significant outage and highlighting the nation’s reliance on the company’s services. Despite this, Kakao recently reported a notable increase in operating profits, reaching 134 billion won for the second quarter of the year—a rise of 18.5% compared to the same period last year.
Additional reporting by Jake Kwon in Seoul.
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