A Seoul court has issued an arrest warrant for Brian Kim, founder of South Korea’s Kakao, on allegations of stock price manipulation linked to Kakao’s 2023 takeover of K-pop agency SM Entertainment. The Seoul Southern District Court approved the warrant after a hearing on Monday, citing concerns over evidence destruction and flight risk. Kim faces up to 20 days in jail while prosecutors continue their investigation.
This development could impact Kakao’s AI projects and operations, given Kim’s pivotal role in the company’s strategy. A Kakao spokesperson assured TechCrunch that the firm is taking steps to maintain management stability with its co-chairs and council.
Kim is accused of manipulating SM Entertainment’s share price during the bidding war with Hybe, owner of BTS’s BigHit. Reports suggest Kakao bought KRW 240 billion (~$174 million) worth of shares, surpassing Hybe’s tender offer price, leading to Hybe’s withdrawal.
Kakao denies the allegations, maintaining that Kim never ordered or condoned any illegal actions. Meanwhile, Kakao’s chief investment officer, Jae-Hyun Bae, is on trial for similar charges.