By C. Perera, JadeTimes News
South Korean technology magnate Kim Beom su, also known as Brian Kim, has been formally charged with stock price manipulation. Kim, who founded the internet giant Kakao, along with other Kakao executives, is accused of purchasing large quantities of shares in the K pop agency SM Entertainment to artificially inflate its stock price and thwart a rival bid to acquire the company.
Kim has been detained since his arrest just over two weeks ago. Following his arrest, Kakao issued a statement asserting that Kim neither ordered nor condoned any illegal actions. However, the Seoul Southern District Prosecutors’ Office has indicted him on charges of violating financial market regulations. A trial date will be scheduled in due course, according to local media reports.
The charges stem from a bidding war preceding Kakao's acquisition of nearly 40% of SM Entertainment in March of the previous year. Prosecutors allege that Kim was involved in a four day buying spree of SM Entertainment shares, aimed at driving up the company's market value beyond the reach of a competing bidder, Hybe, the agency behind the K pop sensation BTS.
This case has sent shockwaves through South Korea's technology sector, where Kim has long been regarded as a pioneering figure in the internet industry. He is the most prominent tech executive in South Korea to be incarcerated since Samsung Electronics chairman Lee Jae yong served 18 months in prison after his 2017 conviction on bribery charges.
Kim's journey from humble beginnings to becoming a billionaire has made him a highly regarded figure in a country where a few powerful family run conglomerates, known as chaebols, dominate much of the economy. He is widely credited with founding and expanding Kakao, which has become one of South Korea's leading internet companies. Kakao operates the nation's largest messaging app and has diversified into various other online businesses, including gaming, shopping, and banking.
In 2022, a fire that damaged Kakao's servers caused a nationwide outage, highlighting the country's heavy reliance on the company's services. Despite the recent legal challenges, Kakao reported an operating profit of 134 billion won for the second quarter of the year, marking an 18.5% increase compared to the same period the previous year, just hours before Kim’s indictment was made public.
