Investigators confront HYBE, BTS's parent company, in connection with suspected fraudulent stock transactions
News Article: Allegations of Fraudulent Trading Surround HYBE and BTS Founder Bang Si-hyuk
In a shocking turn of events, HYBE, the parent company of K-pop superstars BTS, is under investigation for alleged fraudulent trading related to its initial public offering (IPO) in 2020. The focus of the investigation is on HYBE's founder and chairman, Bang Si-hyuk.
Accusations Against Bang Si-hyuk
Bang Si-hyuk is accused of misleading early investors about not planning an IPO, which led them to sell shares to a private equity fund (PEF) linked to him. It is further alleged that he benefited from a secret deal with the PEF, receiving a portion of the profits made after HYBE went public. The estimated gain from this deal is around 200 billion won (US$146 million), though different reports suggest varying figures.
Investigation and Raids
The Seoul police recently raided HYBE's headquarters as part of the investigation into alleged stock manipulation. This investigation follows a report by the Securities and Futures Commission, which reported Bang and former HYBE executives to the prosecution for alleged violations of the Capital Markets Act.
HYBE's Response
HYBE has maintained that all transactions were conducted legally and underwent thorough legal reviews. The company is actively cooperating with authorities and providing detailed explanations. HYBE also sent an email to employees, reassuring them and emphasizing the importance of focusing on their responsibilities during this time.
Legal Implications
If found guilty and the gains exceed 5 billion KRW (approximately $3.64 million), Bang could face serious legal consequences, including life imprisonment or a minimum of five years in prison. However, legal professionals suggest it may be challenging to establish fraudulent trading under the Capital Markets Act due to the nature of the transactions and the time gap between the alleged acts and profit realization.
Meanwhile, all seven BTS members have completed their mandatory military service and are preparing for a comeback next year. HYBE has announced a new album and world tour for BTS in 2026. Despite the ongoing investigation, BTS continues to break records, holding the record as the most-streamed group on Spotify and being the first K-pop act to top both the Billboard 200 and Billboard Artist 100 charts in the United States. Before their military service, BTS generated more than 5.5 trillion won ($4 billion) in yearly economic impact in South Korea.
- The investigation into HYBE's alleged fraudulent trading extends beyond stock manipulation, as accuserse point to a secret deal between Bang Si-hyuk and a private equity fund, featured in the general-news section.
- Amidst the fraud allegations, the health and future of HYBE, a key player in the finance sector and business world, remains uncertain, as the epaper delves deeper into the situation.
- In the crime-and-justice segment, Bang Si-hyuk could potentially face severe penalties if found guilty of Capital Markets Act violations, with potential sentences including life imprisonment or five years in prison, depending on the exact financial gain from the suspected fraud.
