South Korean technology tycoon Kim Beom-su, also known as Brian Kim, has been indicted on charges of stock price manipulation.
Kakao executives, led by Mr. Kim, have been accused of buying large amounts of shares in K-pop agency SM Entertainment to inflate its stock price and undermine a competing takeover offer.
Mr. Kim, who founded the internet giant Kakao, has been in detention since his arrest just over two weeks ago.
In a statement around the time of his arrest, Kakao stated that Mr. Kim did not order or tolerate any illegal activity.
The Seoul Southern District Court indicted Mr. Kim on allegations of breaking financial market rules. The trial date will be set later, according to local reports.
The charges stem from a bidding war preceding Kakao’s acquisition of a nearly 40% controlling stake in K-pop agency SM Entertainment in March last year.
Prosecutors allege Mr. Kim was involved in a four-day buying spree of SM Entertainment shares to push its stock market valuation beyond the reach of rival bidder Hybe, the agency behind K-pop superstars BTS.
The case has sent shockwaves through South Korea’s technology industry, which has long viewed Mr. Kim as a visionary internet pioneer.
He is the highest-profile tech executive to be imprisoned in South Korea since Samsung Electronics chairman Lee Jae-yong served 18 months in prison after his 2017 bribery conviction.
Mr. Kim’s rise from humble beginnings to become a multi-billionaire has made him hugely popular in a country where a few family-run corporations, known as chaebols, control much of the economy.
He is credited with founding and expanding Kakao, one of South Korea’s most successful internet businesses.
Kakao operates South Korea’s largest messaging app, along with a growing list of other online businesses, including gaming, shopping, and banking.
In 2022, a Kakao outage caused by a fire that damaged its servers raised concerns about the country’s reliance on the technology giant’s services.
Just hours before Mr. Kim’s indictment was announced, Kakao reported operating profits of 134 billion won for the second quarter of the year, an 18.5% increase from the same period last year.