Latest news with #Bang
Pink Villa
2 days ago
- Business
- Pink Villa
BTS' meager HYBE IPO shares stir new concern amid Bang Si Hyuk's 400 Billion KRW stock fraud probe
BTS and HYBE's chairman, Bang Si Hyuk, is under investigation for insider trading, which has sparked fresh outrage. BTS fans are once again questioning how little the group received during the company's massive IPO in 2020. While this has major legal and financial implications, it has also reignited an emotional debate. Fans are now revisiting how little BTS received in comparison. Before the IPO, Bang Si Hyuk granted each BTS member around 68,000 HYBE shares. That's 478,695 shares in total for all 7 members. At the time, the shares were worth about 64.6 billion KRW (roughly USD 46 million). Each member received an estimated 9.2 billion KRW (approx. USD 6.7 million). In 2021, three members, Jin, J-Hope, and RM, sold part of their holdings. They earned between 1.8 billion and 4.8 billion KRW each. As of September 2023, BTS members became private shareholders. It's unknown whether they still hold their original shares. Based on last year's stock prices, those shares could now be worth about 15 billion KRW per member. That's roughly USD 11 million each. Still, it doesn't compare to the hundreds of billions earned by Bang and others close to him. Several individuals tied to the equity fund also reportedly profited. Some took home 100 billion to 200 billion KRW. This sharp gap in profit has angered many. Why are fans angry over Bang Si Hyuk? BTS is widely seen as the reason for HYBE's global success. Fans say it's unfair that the group received only a fraction of the financial reward. Many are now challenging Bang Si Hyuk's carefully maintained image as the 'father of BTS.' They're questioning how insiders walked away with hundreds of millions, while BTS got what some call 'breadcrumbs.' HYBE Chairman Bang Si Hyuk's Share Scandal On May 28, South Korea's Financial Supervisory Service (FSS) confirmed it is looking into Bang Si Hyuk for possible financial misconduct. According to Newsen, Bang Si Hyuk told early HYBE shareholders in 2019 that the company had no plans to go public. Based on that information, many sold their shares. But just months later, HYBE moved forward with its public listing. The shares those investors gave up ended up in the hands of a private equity fund. That fund was closely tied to Bang himself. He had a contract ensuring he would receive 30% of the fund's profit from the IPO. The result? Bang Si Hyuk reportedly earned around 400 billion KRW—roughly USD 300 million—after HYBE went public in October 2020. The Financial Supervisory Service (FSS) believes this may constitute illegal insider trading. The case is currently under review and may be handed to prosecutors for formal investigation. Financial experts note that executives often set up favorable terms before an IPO. But when misinformation is involved, ethical and legal boundaries are crossed. As the investigation unfolds, the spotlight is not just on Bang Si Hyuk. It's also on the wider system—one where massive profits often stay at the top, even when they're built on the backs of global stars like BTS. What is an IPO share? When a company wants to sell part of itself to the public for the first time, it is called an Initial Public Offering, or IPO. During an IPO, the company sells shares, which are small pieces of ownership in the company. People who buy these shares own a part of the company. This helps the company get money to grow and lets regular people invest in it as well. For example, HYBE, the company behind BTS, sold shares to the public in 2020 during its IPO. That's when people could buy a part of HYBE for the first time.
News18
4 days ago
- Business
- News18
BTS Agency HYBE Headquarter Raided Over SHOCKING Allegations Of Insider Trading
HYBE manages some of the biggest names in K-pop, including BTS, Tomorrow X Together, LE SSERAFIM, NewJeans, BOYNEXTDOOR, and KATSEYE. HYBE, the powerhouse agency behind global K-pop sensation BTS, is under scrutiny after authorities raided its headquarters in Seoul over shocking insider trading allegations. According to The Korea Times, the Seoul Southern District Prosecutors' Office searched HYBE's office on Thursday as part of an ongoing investigation. The probe centers around a HYBE executive accused of earning illegal profits of 240 million KRW (approximately $175,000) through insider trading. Reports claim the unnamed executive bought stock in YG Plus, an affiliate of HYBE's competitor YG Entertainment, based on confidential information about HYBE's planned partnership with the company. The deal led to a surge in YG Plus' stock price, allowing the executive to allegedly make significant gains. HYBE manages some of the biggest names in K-pop, including BTS, Tomorrow X Together, LE SSERAFIM, NewJeans, BOYNEXTDOOR, and KATSEYE. BTS, the agency's most high-profile act, has achieved global fame with nine platinum records and sold-out stadiums worldwide. But the controversy doesn't end there. In a separate investigation, the Financial Crimes Investigation Unit of the Seoul Metropolitan Police is examining HYBE's chairman Bang Si Hyuk for alleged fraudulent trading dating back to 2019. Authorities allege that Bang misled investors by denying any plans for an IPO, encouraging them to sell their HYBE shares to a private equity fund (PEF) linked to him. At the time, HYBE was secretly preparing to go public. When the company eventually did file for an IPO, Bang reportedly benefitted through a 30% return-sharing deal with the PEF, a transaction not disclosed during the IPO process. The Financial Supervisory Service (FSS) now deems this an act of unfair trading under South Korea's Capital Markets Act. If found guilty and the gains exceed 5 billion KRW (approximately $3.64 million), the offence could lead to life imprisonment or a minimum of five years behind bars. HYBE has responded by stating that all transactions were legally vetted, but the growing controversy is fuelling public concern. First Published:
Pink Villa
4 days ago
- Business
- Pink Villa
Will BTS' agency chairman Bang Si Hyuk face life in prison? Inside 400 Billion KRW stock scandal shaking HYBE
South Korea's financial watchdog is intensifying its probe into HYBE (BTS label) chairman Bang Si Hyuk. Reports emerged that the Financial Supervisory Service (FSS) is preparing to formally request a criminal investigation. The matter revolves around a potentially illegal transaction from 2019. It is allegedly tied to misleading investment practices and undisclosed profit-sharing arrangements, raising serious concerns under the Capital Markets Act. The case centers on a 400 billion KRW (approximately 290 million USD) deal. It could, if proven to be fraudulent, expose the entertainment mogul to severe legal penalties, including life imprisonment. Allegations of deception in pre-IPO activities surface At the heart of the investigation is a claim that Bang Si Hyuk, prior to HYBE 's public listing, intentionally misled investors about the company's IPO plans. According to sources within the financial industry, the FSS' Investigation Department 2 has uncovered evidence. It suggests that in 2019, Bang told HYBE shareholders that there were no immediate plans to go public. This assurance reportedly led some investors to sell their shares, unaware that the company was quietly progressing toward an IPO. In reality, HYBE was taking strategic steps indicative of an imminent public offering, including applying for a designated auditor. The shares were allegedly purchased by a private equity fund (PEF) created by an associate of Bang Si Hyuk. It is an entity with which he is now believed to have had undisclosed financial ties. Secret profit-sharing agreement uncovered Further investigation by the FSS reportedly revealed that Bang had entered into a private profit-sharing agreement with the aforementioned PEF. This deal allegedly allowed Bang to personally collect around 30% of the fund's profits. This ultimately earned him an estimated 400 billion KRW through the transaction. Critically, these arrangements and financial benefits were not disclosed in HYBE's IPO registration documents. Regulators believe this lack of disclosure may qualify as fraudulent and unfair trading. Multiple authorities now involved in the investigation As the FSS prepares for its investigation, reports indicate that the agency will submit a fast-track referral to the prosecution. The fast-track mechanism is typically reserved for high-priority cases involving large-scale financial misconduct. Simultaneously, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency is also conducting a parallel investigation. The case has gained momentum months after initial media reports questioned potential irregularities surrounding HYBE's IPO. Initially treated as a disclosure-related issue, the matter has since been reclassified as a full-fledged securities fraud investigation. Legal ramifications could be severe The implications of the case are profound. If authorities confirm that the alleged profits were indeed earned through illegal means, Bang Si Hyuk could face punishment under Article 443 of the Capital Markets Act. This statute mandates a minimum sentence of five years, and in cases where unlawful profits exceed 5 billion KRW, the court may impose life imprisonment. A spokesperson for HYBE has issued a brief statement asserting that all business dealings were conducted under legal supervision and adhered to the boundaries of current laws. However, that has not eased growing scrutiny from both regulators and the public.
Indian Express
4 days ago
- Business
- Indian Express
BTS mastermind Bang Si Hyuk may face life in prison over suspected $290 million fraud; HYBE shares plunge
HYBE's chairman and CEO, Bang Si Hyuk (the company that manages BTS and other big K-pop names), is reportedly facing a criminal investigation over allegations that he may have been involved in a fraudulent securities transaction. Leading one of the most powerful K-pop agencies, and having also expanded the branches in America by joining hands with Scooter Braun, he now faces accusations of misleading investors. He is in the middle of a probe by South Korea's Financial Supervisory Service (FSS), the country's top financial watchdog. The alleged fraudulent stock market deal is worth 400 billion KRW (roughly $290 million), according to the Korea Times. HYBE's stock is at 266,000 won now, dropping 13,000 won or 4.66% compared to the previous day, according to Chosun Biz. Also read: Explained: Controversy and drama at Hybe, the K-pop company behind BTS Back in 2019, when Bang's HYBE was still called BigHit Entertainment, the FSS suspects that he hid his plans from investors to enlist the company for an Initial Public Offering. At the time, venture capitalists and institutional investors were wondering if the K-pop agency planned to go public. But, according to these investors, Bang told them there were no such plans at the time, and that statement convinced many to sell their shares, believing there was no upcoming public stock listing and thinking there might not be much profit if they held on to the shares. But as the investigation is launched, the FSS says they have gotten their hands on evidence that Bang secretly planned to list the company on IPO. They even applied for a designated auditor, a legal step that's required before a company can list on the stock market. Also read: 'We're getting a BTS concert': Indian fans hopeful as HYBE plans Mumbai office But where did the money go? Sources shared with officials that Bang signed a deal with a private equity fund (PEF), which in return purchased all the sold shares. This fund had been set up by someone close to Bang Si Hyuk. And in 2020, when BigHit's K-pop groups were doing commercially well on the global front, HYBE did go public, and the value of those shares skyrocketed. Further investigation reveals that Bang Si Hyuk even had a secret arrangement with the PEF which stated that he was entitled to 30% of the profits from their investment. These were the profits that came directly from buying those undervalued shares and then selling them after HYBE's IPO, something that was never disclosed by the company. That deal earned him around 400 billion KRW, or $290 million. Under South Korea's Capital Markets Act, it is important for investors to be transparent about financial agreements while filing for an IPO. Failing to do so is considered fraudulent and unfair trading. The FSS is trying to prove that Bang made the investors sell their shares early on so that his close friends and partners could purchase those, and he could secretly profit — he could be charged under Article 443 of the law. And if the profit earned from such fraudulent trading exceeds 5 billion KRW (this one is 400 billion KRW), the punishment is a minimum of 5 years in prison, and in extreme cases, life imprisonment. The FSS has already finished most of their investigation. They're preparing to send it to prosecutors through a fast-track process, meaning things are moving quickly. A HYBE spokesperson has denied all the allegations, claiming that all the transactions were reviewed by lawyers and were within legal limits. But, investigators claim they have access to records of HYBE holding internal meetings and filing paperwork with EY Hanyoung (an external auditor) in November 2019, showing they were absolutely preparing for IPO.
Korea Herald
5 days ago
- Business
- Korea Herald
Hybe founder Bang probed over IPO flaws
Bang Si-hyuk, founder and chairman of the K-pop powerhouse Hybe, has been under investigation over charges that he intentionally misled investors ahead of the company's stock market debut, industry sources said Wednesday. According to the sources, the Financial Supervisory Service (FSS), the country's financial watchdog, has been probing Bang on speculation that he had sought to list Hybe on the stock market while stressing that there was no plan for Hybe's initial public offering (IPO). The sources said Bang signed a deal with private equity funds in 2020 to share a portion of the gains from the Hybe's IPO, and the Hybe chairman received some 400 billion won (US$291.3 million). But in 2019, Bang said to investors that Hybe's stock market listing was impossible while applying for a designated external auditor for its IPO, according to the sources. Hybe, listed on the Korean stock market in October 2020, closed at 265,000 won Wednesday, down 7.33 percent from the previous session's close. (Yonhap)
