Kakao Founder Arrested in South Korea for Alleged Stock Manipulation

Kim Beom-Su, the billionaire founder of Kakao Corp, was detained in Seoul for allegedly manipulating stock prices during Kakao's takeover of a K-Pop firm the previous year.

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Kim Beom-Su, also known as Brian Kim, is a major figure in South Korea's digital sector, having built Kakao’s affiliate network since 2010.

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Prosecutors allege that Kim artificially raised the stock price of SM Entertainment to prevent rival Hybe from purchasing it in February last year.

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Kim denies the allegations and claims he did not authorize any illegal activities. He has not been formally charged yet.

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he Seoul Southern District Court issued an arrest warrant for Kim due to flight risk and potential evidence destruction.

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The lawsuit could significantly impact Kakao’s operations, especially its international expansion and AI investments.

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The lawsuit may affect Kakao’s ability to govern its online banking division, KakaoBank Corp., due to South Korea's financial misconduct restrictions.

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Kakao Corp.'s stock fell 3.4% in morning trading after the news of Kim’s detention, contributing to a 24% decline year-to-date.

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Potential charges against Kim could compromise Kakao's long-term goals and strategic ambitions.

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Kim, holding a 24% stake in Kakao Corp., is the largest shareholder, and his legal issues negatively affect the company’s future.

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The legal threat endangers Kakao’s ambitious projects, including new AI services, potentially hindering growth and innovation.

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