SEOUL (Reuters) – South Korean authorities on Tuesday arrested Kim Bum-soo, the billionaire founder of technology giant Kakao, on suspicion of stock price manipulation over the acquisition of a K-pop agency last year.
Here are some facts about Kim and the conglomerate that dominates South Korea’s tech industry.
*Founder Kim, also known as Brian Kim, is considered a rags-to-riches visionary in the industry. He grew up poor and at one point shared a one-room apartment with his family of seven, but now has a net worth of about $3.4 billion, according to Forbes magazine. He is 58 years old.
*Kim is currently being held in a 1.4 square meter (15 square foot) cell at the Seoul Southern Detention Center, according to South Korean media.
*Kim founded South Korea’s first online gaming portal, Hangame, in 1998. He and a partner launched the KakaoTalk app in 2010, and the free messaging service became a hit among mobile users a year later as smartphones began to take hold in South Korea.
* KakaoTalk gradually introduced services such as emojis and gained thousands of users. Currently, KakaoTalk is the most popular chat platform in South Korea, with 48 million monthly active users as of Q1 2024, a penetration rate of 93% out of South Korea’s population of 52 million.
*In 2014, Kakao merged with Daum, an internet search portal operator, valuing Kakao at approximately $3.1 billion and undergoing a backdoor IPO.
*Since then, the company has leveraged KakaoTalk’s vast user base to expand into services including advertising, gaming, music streaming, entertainment, shopping, payments, online banking and transportation.
* Cocoa-related companies will increase from 26 in 2014 to 124 in 2024.
* According to the Korea Fair Trade Commission, Kakao’s group of affiliated companies has an asset value of 86 trillion won ($62 billion).
*The conglomerate listed Kakao Games in 2020, Kakao Bank and Kakao Pay in 2021, raising funds through IPOs and returning profits to investors.
* Kakao’s mobility division has more than 90% of South Korea’s taxi-hailing market. In November 2023, South Korean President Yoon Seok-yeo said the service was a monopoly and called for a review.
*A data center fire in October 2022 caused the outage of KakaoTalk and some related services for up to several days, raising public concerns about how reliant government agencies and private businesses are on the app.
*In March 2023, Kakao Corp. and affiliate Kakao Entertainment won a bidding war with Hybe, manager of K-pop supergroup BTS, to acquire K-pop agency SM Entertainment. This came two months after Kakao Entertainment received 1.2 trillion won in investment from Saudi Arabia’s Public Investment Fund and Singapore’s GIC.
Kim’s arrest stemmed from an investigation into whether Kakao and its executives committed illegal acts in the takeover process.
*In late 2023, South Korean prosecutors indicted executives on charges of mobilizing approximately 240 billion won ($173.24 million) to buy up SM shares in order to manipulate the company’s share price and thwart Hybe’s takeover of SM.
*Prosecutors are currently investigating cocoa-related companies in at least four other cases, local media said.
(1 dollar = 1,385.3300 won)
(Reporting by Joyce Lee and Miral Fahmy Editing by
