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Founder Of Tech Giant Kakao Arrested For Stock Manipulation

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Kim Beom-su, founder of South Korean internet company Kakao, arrives at a court in Seoul on July 22, 2024. (Photo by YONHAP / AFP)

 

The billionaire founder of South Korean internet conglomerate Kakao was arrested early Tuesday, a Seoul court said, accused of manipulating stock prices during the acquisition of K-pop powerhouse SM Entertainment.

Founded in 2010, Kakao has grown to be a sprawling empire and owns everything from a major online bank to South Korea’s largest taxi-hailing app, plus KakaoTalk — the country’s biggest messaging app which is installed on 90 per cent of phones.

 

It also has a vast entertainment portfolio, encompassing music labels and talent management, which it augmented significantly last year by securing a controlling 39.87 per cent stake in SM Entertainment, becoming its largest shareholder.

 

Prosecutors accuse Kakao of buying 240 billion won ($173 million) worth of SM shares on 553 occasions in February 2023 at inflated prices in a deliberate effort to thwart a takeover bid by HYBE, the agency behind K-pop megastars BTS.

 

HYBE had purchased a 14.8-percent stake from SM’s founder, Lee Soo-man, and proposed buying more shares at 120,000 won each, but withdrew its attempt after SM’s stock prices soared.

 

The Seoul Southern District Court approved an arrest warrant for Kakao founder Kim Beom-su, citing risks of him fleeing and destroying evidence, it said in a statement.

 

Authorities have also questioned other Kakao executives, prosecutors said.

At an emergency Kakao group meeting last week, Kim said that it was a “pity” that the situation had occurred while “group members are working together to renovate management and innovate AI-based technology”.

He later said the charges against him were “not true”.

“I believe the facts will be revealed in the end as I have never ordered or tolerated any illegal activities,” Kim said, according to a press release sent to AFP by the company on Tuesday.

 

Experts said that the detention of the firm’s head could cause problems for the company.

 

“Kakao’s AI-based innovation will likely meet difficulty due to the absence of the head of the company, and the group will have to focus its efforts on eliminating total risk and judicial risk,” said Choi Kyoung-jin, a law professor at South Korea’s Gachon University.

 

“The risk of the group due to the leader being absent from Kakao will probably continue for a considerable period of time,” he added.

“Kakao will need to reorganise its governance.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AFP

International News

Norway To Ban Social Media For Under-16s

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Norway said Friday it will present a bill this year making it the latest country seeking to ban social networks for under 16s, adding that technology companies will be responsible for verifying the age of its users.

 

“We are introducing this legislation because we want a childhood where children get to be children. Play, friendships, and everyday life must not be taken over by algorithms and screens,” Prime Minister Jonas Gahr Store said in a statement.

“This is an important measure to safeguard children’s digital lives,” he added.

Several European countries, such as France, Spain, and Denmark have already said they will introduce a digital age of majority for social networks and others like Australia and Türkey have already done so.

The European Commission has also made clear its determination to take action to protect children and adolescents, notably by unveiling in mid-April an age-verification app that will soon be made available to European citizens.

“I expect technology companies to ensure that the age limit is respected. Children cannot be left with the responsibility for staying away from platforms they are not allowed to use,” added Norwegian  Minister of Digitalisation and Public Governance Karianne Tung.

“That responsibility rests with the companies providing these services. They must implement effective age verification and comply with the law from day one”.

The government said the number of children with phones or using social media had declined  due to a host of measures it had already taken, including “national screen-time guidelines and recommendations for mobile-free schools.”

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Trump envoy wants Italy to replace Iran at World Cup — Report

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An envoy to US President Donald Trump has asked world football’s governing body FIFA to replace Iran with Italy at the World Cup, according to the Financial Times.

 

US special envoy Paolo Zampolli told the FT it would be a “dream” to see four-time World Cup winners Italy at the finals in the United States, Mexico and Canada despite the fact they lost in a qualification playoff last month.

The suggestion was an effort to repair ties between Trump and Giorgia Meloni after the Italian prime minister fell out with the president after criticising his attack on Pope Leo XIV over the Iran war, the newspaper reported.

“I confirm I have suggested to Trump and (FIFA President Gianni) Infantino that Italy replace Iran at the World Cup. I’m an Italian native, and it would be a dream to see the Azzurri at a US-hosted tournament. With four titles, they have the pedigree to justify inclusion,” Zampolli told the FT.

Italy missed out on the World Cup for the third successive time after losing a penalty shootout to Bosnia and Herzegovina in their qualifying playoff final.

Iran’s participation in the World Cup has been thrown into doubt by the war with the US and Israel that broke out on February 28.

The Iranian football federation (FFIRI) had said in April it was “negotiating” with FIFA to relocate the country’s World Cup matches from the United States to Mexico.

But Infantino told AFP last month, while attending Iran’s friendly against Costa Rica in Turkey, that Iran will be at the World Cup and that they will play “where they are supposed to be, according to the draw”.

Zampolli is an Italian-American socialite, businessman and former modelling agent who claims to have introduced Trump to his current wife, Melania Trump.

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5 Key Players Barca Will Let Go This Summer

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Barcelona are set to let five key players leave the club this summer, as they plan a squad overhaul, according to reports.

 

The Blaugrana are currently sitting nine points clear at the top of LaLiga, and are set to romp to a second consecutive title ahead of rivals Real Madrid.

However, after more disappointment in the Champions League, in which they were dumped out by Atletico Madrid, Hansi Flick and the board at Barcelona are preparing to rebuild their squad at the end of the campaign.

Spanish media outlet Marca are reporting that there are five players who have ‘completed a cycle at the club’ and will likely be moved on come the summer.

Marcus Rashford is one of those players. Barcelona can buy the 28-year-old, who is on loan from Manchester United, for £26million under the terms of the deal, but reports have emerged that they are not willing to exercise that option.

The 28-year-old has contributed 12 goals and 13 assists this season to help the Catalan giants run rampant in LaLiga, and as recently as last week, it was believed that Barca would like to keep him.

However, they have made a failed bid to renegotiate the £26m fee with United, who are refusing to budge on the clause which expires on June 15 – four days after the World Cup kicks off in North America.

It means there is a strong chance that Rashford will be forced to return to his boyhood club following England duty if he is selected for the tournament this summer.

Another attacker who seems set for the exit door is none other than Robert Lewandowski.

The Pole, who joined Barcelona from Bayern Munich in 2022, is out of contract in the summer, and there has been little indication that he will sign a new deal at the club.

It is believed that both Lewandowski’s ‘age and recent physical problems’ have thrust his future at Barca into doubt.

Barcelona are said to be looking at freeing up some financial legroom, and for that reason, they want to offload stars on big wage packets.

One of those players is Frenkie de Jong, who is understood to be on just under €400,000 (£348,000) per week, and Marca suggest that he could be sold to ‘ease the financial burden’ on the Spanish giants.

Former Chelsea defender Andreas Christensen and La Masia graduate Marc Casado are also said to be on the proverbial chopping block.

Christensen played 161 games in six seasons with the Blues before making the move to Catalonia in 2022 on a four-year deal. That deal is now set to expire, and there are no plans for an extension at this moment in time.

Casado, however, still has two years left on his contract, but due to a lack of minutes, could be forced to find a new club.

The defensive midfielder has failed to break into the team ahead of Pedri, Eric Garcia, and Gavi, and has started only one of the last eight LaLiga games.

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