Explained: Why BTS' label Hybe's chairman is facing life imprisonment over fraud allegations
BTS fans around the world are eagerly waiting for the K-pop band's reunion after the remaining members are released from military duty in June. However, Bang Si-hyuk, the man who formed BTS, is currently under investigation after being accused of fraudulent and unfair trading practices.
According to Korean media outlets, Bang Si-hyuk, 52, is being investigated by the Financial Supervisory Service (FSS) for allegedly misleading investors and bagging about 400 billion won ($289 million) during the company's initial public offering (IPO) process.
Did Bang Si-hyuk deceive investors?
Sources say the FSS has evidence suggesting Bang may have engaged in deceptive practices involving private equity firms. Back in 2019, when Hybe was still known as BigHit Entertainment, existing shareholders were told there was had no immediate plans to go public, persuading some investors to sell their stakes to a private equity fund allegedly set up by an associate.
However, the company simultaneously began the process to go public after Bang allegedly signed a private shareholders' agreement with local PEFs to share profits from a future listing, a deal that was not disclosed at the time.
While investors suffered heavy losses from the post-IPO sell-off, the private equity fund reaped a large profit after the company went public. The alleged gains from the scheme are estimated at around 400 billion won ($290 million).
The BigHit IPO filed in October 2020 increased Bang's net worth to $2.8 billion, reportedly making him the only billionaire in South Korea's entertainment industry and the sixth-richest person in the country.
Could it lead to life imprisonment?
The FSS is investigating Bang's transactions with the PEFs and plans to refer the case to prosecutors for potential criminal prosecution, according to KED Global. HYBE's alleged secret profit-sharing agreement between Bang and the PEFs could constitute a violation of disclosure rules under the Capital Markets Act.
If found guilty, Bang could face a prison sentence of five years or more, or a life sentence, if the profit exceeds 5 billion won.
Meanwhile, BTS ARMY around the world are eagerly waiting for the seven band members to reunite. While j-hope and Jin have already completed their mandatory military service, Jungkook, Jumin, V, RM and Suga are set to be released from their duties in June.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Khaleej Times
29 minutes ago
- Khaleej Times
Rajeev Shukla to be BCCI interim president: Indian media
Rajeev Shukla is set to be the acting president of the Indian cricket board (BCCI), according to Indian media, quoting BCCI sources. This comes as the current president Roger Binny will turn 70 on July 19, surpassing the age cap set out in the BCCI constitution.
Zawya
43 minutes ago
- Zawya
Japan to raise foreign direct investment target to $1trln by mid-2030s, sources say
TOKYO - Japan is set to raise its 2030 foreign direct investment target by 20% and push the figure as high as 150 trillion yen ($1.05 trillion) by the middle of the decade, people familiar with the matter told Reuters. The mid-decade goal, almost triple the current level of investment of some 50 trillion yen, underscores Japan's push to revitalise its economy by attracting foreign firms to pump money into key growth sectors such as decarbonisation. The new targets, to be formally included in the government's upcoming fiscal and economic policy guidelines in June, represent a sharp escalation from the previous goal of 100 trillion yen by 2030. The plan is to revise the 2030 goal to 120 trillion yen which will set the stage for accelerated effort in the years beyond to reach 150 trillion yen before 2035, said the people, who declined to be identified as the matter is still private. The expanded foreign direct investment strategy is also aimed at stimulating regional economies and creating jobs outside major urban centres, the people said. To this end, they said, the government is considering the use of new grants and enhanced public-private collaboration frameworks to support the establishment of foreign facilities in local areas. ($1 = 143.4300 yen)
Zawya
43 minutes ago
- Zawya
Citi names Bank of America veteran Zhang as new China country head
HONG KONG - Citigroup said on Monday it had appointed Wenjie Zhang as its new country officer and banking head for China, after the exit of its former China head in November. Zhang was also named president and executive director of Citibank China, the company said in a statement. The appointment is subject to regulatory approvals. He will act as the lead Citi representative and as its single, coordinated face in the mainland China market, the company said, leading the team and fostering strong regulatory relationships and risk controls. He will fill the role after former Citi China head Luke Lu left in November for personal reasons. Zhang will join Citi in July and will be based in Shanghai, reporting to Marc Luet, Citi's Head of Japan, Asia North and Australia and Banking, the bank said. A seasoned banker with 30 years of experience in corporate and institutional banking, Zhang was most recently the president of China and Shanghai branch manager for Bank of America China, according to Citi's statement. Prior to that, he was co-head of global banking and executive vice president at HSBC China, after stints at JPMorgan, Citi and Credit Agricole CIB. Citi is cutting up to 200 information technology (IT) contractor roles in China, two people familiar told Reuters last month, as the bank looks to hire its own staff globally for such operations to improve risk management and data governance. Citi, which already has a banking business in China, is in the process of setting up a securities unit in the country. (Reporting by Selena Li; Editing by Jamie Freed)
