Latest news with #CapitalMarketsAct
Pink Villa
2 days ago
- Entertainment
- Pink Villa
NewJeans' Hanni's previous comment about HYBE's money-mindedness reemerge amid Bang Si Hyuk's 400 billion KRW fraud case
HYBE chairman Bang Si Hyuk is currently under intense scrutiny due to the allegedly misinforming investors about HYBE's IPO plans and making profits of around 400 million KRW profits through unfair means. Currently, HYBE is under investigation and public opinion is largely against them. Amid the controversy, Hanni's previous remark regarding the company's greed and lack of artistic integrity gained renewed attention. Hanni's comment about HYBE and ADOR choosing profit over its artists NewJeans publicly declared their split from ADOR, in a press conference in November 2024. Speaking about the reason for such a big decision, Hanni accused ADOR of abandoning its artistic values for commercial gain. She articulated the girl group's collective thoughts regarding the entertainment label not having any integrity and genuineness, as they didn't care about the NewJeans members' well-being anymore. As per her, the label's actions were disrespectful towards the craft they represent and owe their dedication to. She called the HYBE-owned ADOR "a company that no longer has any sincerity in the art of music, a company that only has thoughts about making money, and doesn't have any conscience about the negative effect they create through their non-authentic means." Check out fan reactions to the resurfaced incident The majority of fans appeared to be of the same opinion as Hanni. NewJeans' devoted supporters, who stood firmly by the group during the intense public scrutiny surrounding the ADOR conflict, also rallied behind Hanni's resurfaced comment. They highlighted how Hanni was previously criticized and labeled "ungrateful" for speaking out against her agency, but in light of the recent Bang Si Hyuk stock fraud allegations, her words seemed to have been vindicated. Currently, Bang Si Hyuk case is being investigated for potential violations of the Capital Markets Act and unfair trading practices related to HYBE's 2020 IPO. If found guilty, he could face severe penalties, including life imprisonment or a minimum of five years in prison, under Article 443 of the Capital Markets Act. In the light of the issue, comments like "time cleared NJZ (NewJeans' new moniker)" and "Bang PD has done everything possible to kill its (HYBE's) values" flooded social media. Some even bashed the agency's supporters, calling them "clowns", while others expressed their eager anticipation of the quintet to put an end to their hiatus and return back to the K-pop scene.
Hindustan Times
2 days ago
- Business
- Hindustan Times
Could HYBE founder Bang Si-hyuk face life sentence in jail for alleged fraud? Here's all you need to know
Ahead of BTS' discharge from military service, its record label and talent agency HYBE is in the middle of a controversy as founder and chairman Bang Si-hyuk could face investigation by prosecutors over alleged fraudulent activities. As per a KED Global report, in 2019, Si-hyuk misled shareholders by telling them that the company didn't have plans to go public, but later proceeded with an initial public offering. (Also Read | Waiting for BTS World Tour 2025? HYBE CEO shares details on when band will reunite) The Seoul Metropolitan Police Agency has already submitted a warrant request to prosecutors for the search and seizure of HYBE's office. The Financial Supervisory Service has reportedly obtained evidence that Si-hyuk misled shareholders. In 2019, after HYBE informed its existing shareholders that it had no plans to go public, some investors divested their stakes. HYBE, then, started a process to go public after Si-hyuk allegedly signed a private shareholders' agreement with local PEFs — STIC Investments Inc., Estone Equity Partners and New Main Equity — to share profits from a future listing. This deal remained undisclosed until HYBE's stock plunged immediately after its IPO. While investors met with heavy losses from the post-IPO sell-off, Si-hyuk reportedly received 400 billion won ($289.3 million) from the PEFs based on the confidential arrangement. HYBE has found itself in troubled waters over the alleged failure to disclose the profit-sharing agreement between Si-hyuk and the PEFs. This could be a violation of disclosure rules under the Capital Markets Act. The Financial Supervisory Service is conducting a fast-tracked investigation into Si-hyuk's transactions with the PEFs. If Si-hyuk is prosecuted and convicted of fraudulent disclosure and illicit gains, he could be jailed for five years or more. He reportedly could also face a life sentence if the profit exceeds 5 billion won, in accordance with the Capital Markets Act. Meanwhile, prosecutors have already raided the HYBE Seoul headquarters over an insider trading probe involving one of its employees. The person is being investigated for allegedly using nonpublic information to gain approximately 240 million won in illicit profits.
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.
