Tech poster child poses a problem for Korea Inc

SM Entertainment Co

23/07/2024 05:31

(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
    By Robyn Mak
       HONG KONG, July 23 (Reuters Breakingviews) - Billionaire
Brian Kim’s arrest for his role in a K-Pop deal adds to his
Kakao empire's mounting legal woes. Its dominance in messaging
also is a regulatory headache. Yet a tough crackdown on the
company could jeopardise the country’s new breed of promising
global businesses.
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    CONTEXT NEWS
    The billionaire founder of South Korean tech giant Kakao
Corp, Kim Beom-su, was arrested on July 23 on accusations of
manipulating stocks during the acquisition of a K-Pop agency
last year.
    Prosecutors say Kim, also known as Brian Kim, was involved
in manipulation of the stock price of SM Entertainment in
February 2023 to hinder a competitor, Hybe, from acquiring the
K-Pop agency.
    Kim has not been charged with wrongdoing and has denied the
accusations, saying he has never ordered or tolerated any
illegal activity, the company said in a statement. Kim's arrest
would last up to 20 days, during which prosecutors are expected
to investigate further before bringing charges, according to
South Korean criminal procedure.
    Kakao shares were down 4.6% to 39,150 won during late
morning trading in Seoul on July 23.

 (Editing by Una Galani and Aditya Srivastav)
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robyn.mak@thomsonreuters.com))