How Okay-pop Might Result in the Downfall of a Self-Made Korean Tech Tycoon

Kakao Corp. founder Kim Bum-soo was arrested on Tuesday in Seoul, South Korea. It might imply nothing to Westerners, however the story is a weird story of how a well-known, self-made tech billionaire fell from grace… partially as a result of he purchased a controversial Okay-pop company.

Kim, additionally referred to as Brian, is accused of manipulating the inventory value of SM Leisure throughout a high-profile takeover battle. Kim’s principal rival within the bidding struggle? Hybe, the Okay-pop label greatest recognized for BTS. Prosecutors Kakao Chief Funding Officer Bae Jae-hyun Indictedfinal yr on related expenses. Kim denies any wrongdoing.

By comparability, Kakao Corp. is greatest recognized for KakaoTalk, South Korea’s hottest messaging app, utilized by about 47 million in another country’s 50 million inhabitants. Name it the Korean WhatsApp, however Kakao is greater than only a messaging platform. The corporate has dozens of branches that do every part from procuring and banking to music and ride-hailing. The corporate is at present valued at about 17 trillion Korean received, or $12.4 billion.

If Kakao was already so dominant, you may surprise why the corporate would allegedly threat monetary crime to amass a Okay-pop firm. However SM Leisure isn’t simply any label. It’s one of many three main Okay-pop businesses, liable for hits like Ladies’ Technology, Exo, NCT, and Aespa.

Symbolically, Kim’s arrest is important as a result of amongst Korea’s elite, he’s a uncommon instance of a self-made billionaire. In different phrases, he’s not a chaebol. In Korea, chaebols are family-owned conglomerates similar to Samsung, Hyundai, SK Group, and LG. These chaebols dominate the South Korean economic systemtypically on the expense of smaller companies. Kim, against this, was a traditional rags-to-riches story, rising up poor to change into the primary in his household to attend school. On the top of his profession, Kim even overtook Samsung inheritor Lee Jae-yong to change into the richest individual in South Korea with The fortune is estimated at greater than 13 billion {dollars}.

Critically, although, this aggressive pursuit of a monopoly is what actually obtained Kakao and Kim into sizzling water. The corporate confronted elevated authorities scrutiny after a hearth at a Kakao knowledge middle in 2022 triggered five-day nationwide shutdownelevating considerations about Korea’s reliance on a couple of tech corporations. Kakao has additionally since change into the topic of tax evasion investigations. In accordance with BloombergThis yr alone, Kakao’s worth has fallen by a 3rd, and Kim has misplaced about $10 billion of his fortune.

Though it most likely did not assist that Kim confirmed some power-hungry tendencies throughout one of many largest Okay-pop scandals of the last decade.