SEOUL - South Korean authorities have issued an arrest warrant for Kakao Corp. founder Brian Kim over allegations of market manipulation, setting the stage for him to become the most prominent business figure in the country to wind up in jail in years.

The Seoul Southern District Court issued a warrant for the arrest of the 58-year-old internet entrepreneur, citing “concerns of evidence destruction and flight.”

Kim, celebrated for creating a messaging and social-media platform that linked online services from banking to webtoons, is facing accusations that he was involved in a stock-rigging scheme during the high-profile takeover of K-pop agency SM Entertainment in 2023.

Kakao won a controlling stake in SM after an intense bidding battle with Hybe, the label behind K-pop sensation BTS. Financial regulators have since accused executives at Kakao and unit Kakao Entertainment Corp. of buying 240 billion won (S$232 million) in shares of SM at the time, to disrupt Hybe’s offer.

Kim and Kakao spokespeople have repeatedly denied the allegations and said no illegal activities transpired during the acquisition of SM. A spokesperson for Kakao declined to comment on the arrest warrant on July 22.

The warrant is a remarkable turn of events for a self-made billionaire who rose from poverty to build Korea’s leading internet firm. Kim founded the company that would become Kakao in 2006 and started the massively successful KakaoTalk mobile messaging app four years later. He then expanded into a plethora of services including online banking, shopping, gaming and ride-hailing.

Kakao currently ranks as the country’s 15th largest conglomerate by assets, ...