Time: 2024-07-22
South Korean prosecutors are seeking an arrest warrant for billionaire Kakao Corp. founder Brian Kim . This is a surprise twist in their investigation into alleged stock market manipulation . The Seoul Southern District prosecutors office is seeking to detain the celebrated entrepreneur after conducting a probe into alleged price - rigging during a bidding war over SM Entertainment Co. in 2023 . Kakao 's spokesperson denied the allegation and said no illegal activities had transpired during the acquisition of SM . The court will determine whether to issue the warrant after a hearing . Kakaos stock fell as much as 0.9 % to 40,550 won ( 9).
Kim Beom - su , the founder of Kakao , is facing growing doubts about the company 's efforts to revamp its governance and business structure . Prosecutors have set their sights on Kim , alleging that he violated financial laws in the process of Kakao 's takeover of a stake in K - pop agency SM Entertainment last year . Kim emphasized the need to overhaul Kakao 's governance at a meeting with affiliate leaders . Kakao has been making efforts to revamp its corporate governance since December last year , after being criticized for its business practices . The company has faced disruptions and criticism in the past , and Kim 's possible arrest could weigh on the firm 's restructuring and investments.
Prosecutors suspect Kims involvement in an alleged scheme where leaders of Kakao affiliates are accused of manipulating SMs stock prices to interfere with bidding competitions . Whether Kim will be arrested or not will be determined on July 22 by Judge Han Jung - seok of the Seoul Southern District Court . The prosecution is moving swiftly against Kim , prompting industry officials to say that this symbolizes Kakao 's ill - fated relations with the prosecution and the Yoon Suk Yeol administration.
If Kakao is sentenced with fines or higher punishments for the stock rigging case , the company may have to unload its stake in Kakao Bank . Kakao now holds a controlling 27.17 percent stake in Kakao Bank . Analysts are casting gloomy outlooks on Kakao 's rebound , irrespective of founder Kim 's legal risks . With improvements in Kakao 's profitability becoming difficult , its key subsidiaries are showing sluggish improvements in their profit , delaying Kakao 's rebound.
Kakao 's efforts to reveal its own AI model have not been successful so far , and the company is now focusing on AI - based services . Kakao Talk has experienced service disruptions , adding to the challenges faced by the company . Kim 's arrest could potentially halt Kakao 's restructuring and new investments . The future of Kakao remains uncertain as it navigates legal challenges and strives to regain momentum in the market.
Business
