South Korean technology tycoon, Kim Beom-su, who is 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 offer to take over the company.
Mr Kim, who founded the internet giant Kakao, has been in detention since being arrested just over two weeks ago.
In a statement around the time of his arrest, Kakao said Mr Kim did not order or tolerate any illegal activity.
The Seoul Southern District Prosecutors’ Office indicted Mr Kim on allegations that he broke financial market rules.
The trial date will be set at a later stage, according to local reports.
The charges are related to a bidding war that came ahead of Kakao buying a controlling stake in K-pop agency SM Entertainment of almost 40% in March last year.
Prosecutors allege Mr Kim was involved in a four-day buying spree of SM Entertainment shares aimed to push up its stock market valuation beyond the reach of a rival bidder Hybe, the agency behind K-pop superstars BTS.
The case has sent shockwaves through South Korea’s technology industry, which has long seen Mr Kim as a visionary internet pioneer.
He is the most high profile tech executive to be placed behind bars in South Korea since Samsung Electronics chairman Lee Jae-yong served 18 months in prison after being convicted in 2017 on bribery charges.
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, which is now one of South Korea’s most successful internet businesses.
Kakao runs South Korea’s largest messaging app, along with a growing list of other online businesses that include gaming, shopping and banking.
In 2022, a Kakao outage caused by a fire that damaged its servers raised concerns about how reliant the country had become 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.
Additional reporting by Jake Kwon in Seoul