Seoul court issues arrest warrant for Kakao founder

A Seoul court has issued an arrest warrant for Brian Kim, the founder of South Korea’s internet giant. cacaoregarding allegations of stock price manipulation related to the company’s acquisition of a K-pop agency. SM Entertainment In 2023.

The Seoul Southern District Court said Tuesday it had issued an arrest warrant for Kim after a hearing on Monday due to “concerns of destroying evidence and fleeing.”

He could be jailed for up to 20 days while prosecutors continue their investigation before bringing charges. This could disrupt Kakao’s operations and its plans for artificial intelligence, as the founder has been a key figure in the company’s strategic decisions.

A Kakao spokesperson told TechCrunch that the company will do everything it can to narrow the management gap with its co-chairs and board.

Kim faces charges of involvement in manipulating SM Entertainment’s stock price during a bidding war for the company in 2023. Kakao was competing with Hyebi, the owner of South Korean music agency BigHit, which is behind the K-pop band BTS.

Cocoa is It said He is accused of purchasing 240 billion won (about $174 million) worth of SM Entertainment stock through 553 transactions in February 2023. This allegedly pushed the company’s stock price above Hybe’s offer price of 120,000 won per share, prompting Hybe to withdraw its offer.

Kakao said in a statement last week that the accusations were untrue, as Kim had never ordered or tolerated any illegal activities.

Jae Hyun Bae, chief investment officer of Kakao, Arrested Last October, after being accused of manipulating stock prices after the takeover. He is now on trial.

Founded in 2006, Kakao launched South Korea’s most popular messaging app, Kakao Talk, in 2010. It has become the country’s super app and now offers a range of services, including on-demand taxi service Kakao Mobility, online banking platform Kakao Bank, and music streaming service Melon. From 2011 to 2022, Kakao completed 13 acquisitions, with an average acquisition amount of $546 million. According to Tracxn.