Latest news with #BangSi-hyuk
Korea Herald
7 hours ago
- Business
- Korea Herald
BTS producer becomes first tycoon referred to prosecution under new president's toughened financial oversight
Hybe says it will actively clarify Bang Si-hyuk's suspicions to regain trust South Korea's financial regulators have referred Hybe Chairman Bang Si-hyuk to the prosecution on charges of fraudulent trading, accusing him of misleading shareholders during the company's initial public offering and profiting nearly 400 billion won ($287.6 million) in the process. This marks the first time under the Lee Jae Myung administration that authorities have taken such strong disciplinary action against the head of a major conglomerate. Regulators reportedly gave Bang an unusual opportunity to appear in person and explain himself, but he declined to attend. The Financial Services Commission's Securities and Futures Commission held a regular meeting Wedneday and announced that it had referred Bang and former Hybe executives to prosecutors on suspicion of violating the Capital Markets Act, particularly its ban on unfair trading practices. A referral to the prosecution is the most severe action financial regulators can take against an individual accused of violating the law, in addition to administrative penalties. Under the Capital Markets Act, a person who gains or avoids losses of over 5 billion won through unfair trading may face a prison term of five years to life. 'The suspects circumvented the lock-up period meant to prevent major shareholders from offloading shares immediately after listing, and dumped their shares on the market for profit. The nature of this violation is particularly serious,' a financial authority official said via local media outlet. 'The stock price plunged afterward, causing significant harm to ordinary retail investors.' Hybe said it would actively work to clarify the suspicions and restore market trust. 'It is unfortunate that the financial regulators did not accept the major shareholder's explanation during the Financial Supervisory Service's investigation, in which he made clear he did not pursue personal gains based on the company's IPO,' Hybe said in a statement sent to The Korea Herald on Thursday. 'Nevertheless, we respect the decision and will do our utmost in the upcoming investigation to actively address the allegations and recover the trust of the market and our stakeholders,' the company added. According to authorities, Bang allegedly deceived early investors into selling their shares by falsely claiming that Hybe's IPO prospects in 2019 were bleak. He is also believed to have signed a private agreement with a private equity fund that had acquired a large stake in the company, pledging to share 30 percent of any future gains from selling his shares — eventually profiting nearly 400 billion won. In response to this type of misconduct, the Korea Exchange revised its IPO due diligence checklist late last year, adding requirements for underwriters to inspect contracts between shareholders and assess risks to investor protection.
Straits Times
8 hours ago
- Business
- Straits Times
BTS creator faces probe for allegedly misleading investors over K-pop agency Hybe's IPO
SEOUL – Bang Si-hyuk, the billionaire founder of K-pop agency Hybe faces investigation by South Korean prosecutors for allegedly misleading investors ahead of its 2020 initial public offering (IPO). Mr Bang, also known as 'Hitman' Bang, is widely recognized as the creator of the globally successful K-pop group, BTS. He established Big Hit Entertainment in 2005, whose name was later changed to Hybe. BTS earlier in July announced a new album and a world tour after recently completing military service. The Financial Services Commission (FSC) referred the largest shareholder of an unidentified company and its former executives on allegations of deceiving investors and violating trading practices. While the FSC did not name the probe's targets in its statement, a person familiar with the investigation told Bloomberg News the company in question was Hybe. The parties 'deceived existing shareholders by making it seem as if the listing would be delayed' even though the company was preparing for the IPO, the FSC said in the statement. That prompted the existing investors to sell their holdings to a special purpose vehicle that was established by a private equity fund in which the company executives were involved, the statement added. Hybe shares fell as much as 1.3 per cent on July 17, before recovering to trade up 0.8 per cent by 10.50am Seoul time. The stock is up about 39 per cent so far this year. 'The recent movement in Hybe's stock price is driven more by expectations for next year's earnings than by external factors related to chairman Bang,' said Kim Jihyun, analyst at Heungkuk Securities. 'Under Hybe's current multi-label structure, Bang's legal risks are not directly affecting the share price yet.' Hybe said it respects the FSC's decision and will do its best to proactively take efforts to restore the trust of the market as well as stakeholders. It also expressed regret that the FSC rejected Mr Bang's explanation that he did not pursue the IPO for personal gain. Top stories Swipe. Select. Stay informed. Singapore HSA launches anti-vaping checks near 5 institutes of higher learning Singapore Kpod vapes, zombie kids: Why it's time to raise the alarm Opinion The workplace needs to step up on mental health to match Singapore's efforts at the national level Singapore Singapore Zoo celebrates reptile baby boom, including hatchings of endangered species Life First look at the new Singapore Oceanarium at Resorts World Sentosa Business Market versus mission: What will Income Insurance choose? Business Singapore key exports surprise with 13% rebound in June amid tariff uncertainty Opinion AI and education: We need to know where this sudden marriage is heading The Hybe IPO raised about US$820 million (S$1.05 billion), pricing shares at the top of the marketed range. The FSC allege that Mr Bang, whose net worth is estimated at US$2.3 billion, according to the Bloomberg Billionaires Index, had signed a profit-sharing agreement with the private equity fund, but concealed that information during the IPO process. That agreement allowed Mr Bang to collect about 30 per cent of the profits from the share sales after the IPO, the statement added. Mr Bang, 52, is said to have made approximately 190 billion won (S$176 million) through the side transaction, according to Yonhap News. FSC did not reveal the amount Mr Bang made from the side deal. The investigation is the latest controversy to hit Hybe. In 2024, the firm was shaken by a rare public feud involving chart-topping girl group NewJeans, which sought to unilaterally terminate a lucrative exclusive contract with Hybe affiliate Ador. BLOOMBERG
Korea Herald
9 hours ago
- Business
- Korea Herald
BTS producer becomes first tycoon referred to prosecution under Lee's toughened financial oversight
Hybe says it will actively clarify suspicions to regain trust South Korea's financial regulators have referred Hybe Chairman Bang Si-hyuk to the prosecution on charges of fraudulent trading, accusing him of misleading shareholders during the company's initial public offering and profiting nearly 400 billion won ($287.6 million) in the process. This marks the first time under the Lee Jae Myung administration that authorities have taken such strong disciplinary action against the head of a major conglomerate. Regulators reportedly gave Bang an unusual opportunity to appear in person and explain himself, but he declined to attend. The Financial Services Commission's Securities and Futures Commission held a regular meeting Wedneday and announced that it had referred Bang and former Hybe executives to prosecutors on suspicion of violating the Capital Markets Act, particularly its ban on unfair trading practices. A referral to the prosecution is the most severe action financial regulators can take against an individual accused of violating the law, in addition to administrative penalties. Under the Capital Markets Act, a person who gains or avoids losses of over 5 billion won through unfair trading may face a prison term of five years to life. 'The suspects circumvented the lock-up period meant to prevent major shareholders from offloading shares immediately after listing, and dumped their shares on the market for profit. The nature of this violation is particularly serious,' a financial authority official said via local media outlet. 'The stock price plunged afterward, causing significant harm to ordinary retail investors.' Hybe said it would actively work to clarify the suspicions and restore market trust. 'It is unfortunate that the financial regulators did not accept the major shareholder's explanation during the Financial Supervisory Service's investigation, in which he made clear he did not pursue personal gains based on the company's IPO,' Hybe said in a statement sent to The Korea Herald on Thursday. 'Nevertheless, we respect the decision and will do our utmost in the upcoming investigation to actively address the allegations and recover the trust of the market and our stakeholders,' the company added. According to authorities, Bang allegedly deceived early investors into selling their shares by falsely claiming that Hybe's IPO prospects in 2019 were bleak. He is also believed to have signed a private agreement with a private equity fund that had acquired a large stake in the company, pledging to share 30 percent of any future gains from selling his shares — eventually profiting nearly 400 billion won. In response to this type of misconduct, the Korea Exchange revised its IPO due diligence checklist late last year, adding requirements for underwriters to inspect contracts between shareholders and assess risks to investor protection.
Reuters
a day ago
- Business
- Reuters
South Korea financial regulator refers HYBE K-pop agency chair Bang for investigation, Yonhap says
SEOUL, July 16 (Reuters) - South Korea's financial regulator, the Financial Services Commission, has referred the chairman of K-pop agency HYBE to prosecutors for investigation of his activities during the company's stock market listing, Yonhap News Agency reported on Wednesday. The commission alleged that, ahead of the 2020 IPO, Bang Si-hyuk and three other executives "deceived" investors into selling their shares to an investment company they controlled and eventually profited from share sales after the listing, the Yonhap report said. The Financial Services Commission did not answer telephone calls seeking comment. HYBE said in a statement to Reuters that it regretted that the explanation by the "largest shareholder" - referring to Bang - to financial authorities that "he did not pursue personal gain on the premise of an IPO" was not accepted. "While we respect the financial authorities' decision, we will do our best to proactively clarify any related speculations in the upcoming investigation to restore the trust of the market as well as our stakeholders," it said. HYBE manages the global hit boy band BTS.
Bloomberg
a day ago
- Business
- Bloomberg
Billionaire Hybe Founder Said to Face Probe Over IPO Disclosures
Bang Si-hyuk, the billionaire founder of BTS-agency Hybe Co. Ltd. faces investigation by South Korean prosecutors for allegedly misleading investors ahead of its 2020 IPO. The Financial Services Commission referred the largest shareholder of an unidentified company and its former executives on allegations of deceiving investors and violating trading practices. While the FSC did not name the probe's targets in its statement, a person familiar with the investigation told Bloomberg News the company in question was Hybe.
