Arrest of affluent businessman Brian Kim for alleged K-pop market manipulation
In a surprising turn of events, Brian Kim, the founder of South Korea's ubiquitous Kakao messaging app, has been arrested in a K-pop stock manipulation case. Kim, who rose from poverty to become one of South Korea's few billionaires, is currently in jail in Seoul.
Kim's journey began in 1998 when he launched Hangame, South Korea's first online gaming portal. His success continued with KakaoTalk, a messaging app that boasts about 53 million users globally. Kakao expanded into various sectors such as online banking, music streaming, advertising, shopping, and transport, establishing Kakao as the largest IT conglomerate in South Korea.
Kim's net worth peaked in 2021, making him the richest person in South Korea, surpassing Samsung heir Jay Y. Lee. However, his empire has since faced challenges. Kakao shares have lost 77% of their value, and Kim stands accused of manipulating SM Entertainment's stock price to hinder a rival, Hybe (which manages supergroup BTS), from acquiring it.
The case poses a challenge for the authorities, as they must balance enforcing financial crime laws without jeopardizing South Korea's new breed of global businesses. SM Entertainment, a renowned Korean K-pop agency, is set to launch its first UK boy band. The market for K-pop events was valued at $8.1 billion in 2021 and is predicted to reach $20 billion by 2031, highlighting the industry's growing importance.
TikTok has contributed to a new global fandom for K-pop, with localized idol groups appearing in various locations. South Korea's cultural exports, including K-pop, have a significant economic impact on the country. The global popularity of the "Hallyu" - Korean wave - significantly increased in 2024, with K-pop stars and actors becoming more visible worldwide.
Kim Beom-soo, the founder of Kakao, was born into poverty and shared a single room with seven family members. After graduation, he joined Samsung's IT services unit as a developer specializing in online communication. Kim saw getting rich as the measure of a good life, but after achieving his goal, he felt rudderless and lacking direction.
Both Kim and Kakao's chief investment officer deny the charges against them. The outcome of this case could have significant implications for South Korea's tech and K-pop industries. As the investigation continues, the world watches with bated breath.
