Billionaire entrepreneur Brian Kim arrested over K-pop stock manipulation
Brian Kim caught the wave that propelled Korean pop stars and actors to global stardom. Now accused of financial wrongdoing, he is in for the fight of his life.
![Kakao Founder Brian Kim Attends Parliamentary Hearing](https://cdn.mos.cms.futurecdn.net/REnybbXhRkPUH2TnB5PhWo-415-80.jpg)
For many Korean expatriates, says Sohee Kim on Bloomberg, 2024 is the year when the “Hallyu” – Korean wave – went global. “K-pop stars and Korean actors now habitually beam out… from billboards and vitrines” in a way unimaginable a decade ago. TikTok has fanned a new “global fandom” with “localised” idol groups popping up everywhere. The renowned Korean K-pop agency, SM Entertainment, will shortly “launch its first UK boy band”. The K-pop events market alone was valued at $8.1 billion in 2021 and is predicted to reach $20 billion by 2031, notes Asia Fund Managers. South Korea’s cultural “export hit” is having “a huge economic impact on the country”.
Against this backdrop, news that billionaire Brian Kim – the force behind South Korea’s ubiquitous Kakao messaging app and the country’s most prominent entrepreneur – has been arrested in a “K-pop stock manipulation case” has proved sensational, says the Financial Times. Kim, 58, who is currently in jail in Seoul, won a takeover battle last year to secure the prize of SM Entertainment. He now stands accused of manipulating SM’s stock price to hinder a rival, Hybe (which manages supergroup BTS), from acquiring it. Kakao’s chief investment officer is also on trial. Both deny the charges.
The case poses a problem for the authorities, says Reuters Breakingviews. They can’t look weak on financial crime. On the other hand, “a tough crackdown risks… jeopardising the country’s new breed of promising global businesses”. Kim is an undoubted figurehead, having risen from poverty to become one of South Korea’s few self-made billionaires – “a rare feat”, says the FT, in an economy still “dominated by a handful of big conglomerates” known as “chaebol”. The Hindu recently dubbed him “a rags-to-riches visionary”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
![https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg](https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748-320-80.jpg)
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Brian Kim: the self-made billionaire
Kim certainly grew up in poverty, “at one time sharing a single room with seven family members”, says Bloomberg.
Born Kim Beom-soo, to a pen factory worker and a maid, he was the first of his siblings to attend college – studying engineering at the prestigious Seoul National University and offering private tutoring in his spare time to help pay for his tuition.
On graduation, he joined Samsung’s IT services unit as a developer specialising in online communication, before launching his own company, Hangame, in 1998, originally as an internet café. The company later evolved to become South Korea’s first online gaming portal.
After a stint in Silicon Valley in the 2000s, Kim returned to launch a messaging app, striking gold with KakaoTalk in 2010. The messenger service has about 53 million users globally, 88% of whom are in the domestic market, where Kakao enjoys a 93% penetration rate.
Kim's entrepreneurial expansion
What made Kim super-rich was leveraging this “massive user base” to expand into a host of new sectors, says Reuters. Kakao moved into online banking, music streaming advertising, shopping and transport. Having floated the group via “a backdoor listing” in 2014, the conglomerate now has roughly 124 affiliates – many of which have been profitably floated.
Kakao peaked in 2021 when the pandemic spurred demand – sending shares soaring 90%. Kim, then worth $13 billion, chalked up a remarkable milestone, says Tatler Asia. His “exponential rise” saw him “unseat Samsung heir Jay Y. Lee as the richest person in South Korea”. Kakao shares have since lost some 77% of their value.
Kim used to see getting rich as the measure of a good life, says Bloomberg. “However, after achieving the wealth I aimed for, I was left feeling rudderless and lacking direction,” he said. A life-changing court case should focus the mind.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
Jane writes profiles for MoneyWeek and is city editor of The Week. A former British Society of Magazine Editors editor of the year, she cut her teeth in journalism editing The Daily Telegraph’s Letters page and writing gossip for the London Evening Standard – while contributing to a kaleidoscopic range of business magazines including Personnel Today, Edge, Microscope, Computing, PC Business World, and Business & Finance.
She has edited corporate publications for accountants BDO, business psychologists YSC Consulting, and the law firm Stephenson Harwood – also enjoying a stint as a researcher for the due diligence department of a global risk advisory firm.
Her sole book to date, Stay or Go? (2016), rehearsed the arguments on both sides of the EU referendum.
She lives in north London, has a degree in modern history from Trinity College, Oxford, and is currently learning to play the drums.
-
The best properties for sale for around £500,000
Properties for sale for around £500k – from a Grade II-listed former rectory in County Durham to an early 19th-century chateau in southwest France.
By Natasha Langan Published
-
M&S recovery has momentum: will it stick?
After years of decline, M&S seems to have turned a corner. But is this just a “dead cat bounce”?
By Dr Matthew Partridge Published
-
Paetongtarn Shinawatra becomes Thailand's youngest-ever PM – will she succeed?
Paetongtarn Shinawatra is joining the family business: both her father and aunt have governed the country. She has promised to “end a cycle of coups”. Can she?
By Jane Lewis Published
-
Indonesia’s new $30 billion capital city is hit by 'delays'
What is causing the delays in Indonesia’s new capital city and when will it be complete?
By Stuart Watkins Published
-
Bill Gates: from hero to villain and back again
Bill Gates was a tech billionaire at 31. Then he was knocked down for ruthless business practices – and hailed again for his philanthropy. Who is the real Bill Gates?
By Jane Lewis Published
-
Beijing targets the boom in bonds
Stocks and property in Beijing have disappointed, but bonds are performing well
By Alex Rankine Published
-
Jeff Yass: the poker player betting on Trump
Jeff Yass is a professional gambler who built one of Wall Street’s most powerful trading operations and is backing Donald Trump for president. What’s in it for him?
By Jane Lewis Published
-
Japan's stock market crashes – what it means for investors
Japan's stock market crash could ultimately mean “lower prices and better valuations” for investors
By Alex Rankine Published
-
Michele Kang: the first tycoon of women’s football
Michele Kang made her fortune in healthcare IT. Then, in 2019, she became interested in football. Her sports empire now consists of clubs around the globe.
By Jane Lewis Published
-
Why is the Japanese yen weak?
The yen has weakened far more than expected, even though the economy and stocks are looking much healthier
By Cris Sholto Heaton Published