News

Bang Si Hyuk's $300 million insider trading investigation sparks renewed interest in the meager shares handed to the BTS members during HYBE's IPO

AKP STAFF

Posted by Susan-Han 1 day ago 15,803

Earlier this week on May 28 KST, it was reported that South Korea's Financial Supervisory Service is investigating HYBE Labels chairman Bang Si Hyuk for unfair insider trading.

It's believed that Bang Si Hyuk deceived existing shareholders in 2019 by lying about HYBE's intentions to go public. He then convinced the shareholders to sell their shares to his own private equity fund management company, shortly before pursuing HYBE's IPO in October of 2020. At the time, Bang Si Hyuk had signed a contract with the private equity fund company which guaranteed him 30% of all profits earned through HYBE's public listing. Later, the payout from the private equid fund contract earned Bang Si Hyuk 400 billion KRW (~ $300 million USD).

According to the Financial Supervisory Service, Bang Si Hyuk may have committed illegal insider trading by deceiving existing shareholders. The service is currently reviewing the case before handing it over to the prosecutor's office for a formal investigation.

The above news report has sparked renewed interest and outrage from fans of BTS, the artists primarily responsible for HYBE's immense growth.

Previously, it was confirmed that Bang Si Hyuk gave each of the 7 members of BTS approximately 68,000 shares (480,000 total) ahead of HYBE's public listing in 2020. At the time, the shares were worth approximately 64.6 billion KRW (9.2 billion KRW (~ $6.7 million USD) per person). In 2021, members Jin, j-hope, and RM sold a portion of the shares they owned, pocketing 4.8 billion KRW, 1.8 billion KRW, and 3.1 billion KRW respectively. Currently, it is unknown of the other BTS members continue to possess their allotted shares in HYBE. The members' statuses were changed from public to private shareholders after September of 2023.

If the BTS members still possess their allotted shares, then per last year's stock prices, each of the members would have earned a profit of 15 billion KRW (~ $11 million USD) from the shares given to them by Bang Si Hyuk. These figures are notably lower than the profits earned by Bang Si Hyuk (400 billion KRW) and other key figures affiliated with Bang Si Hyuk. It's believed that several others used equity funds to pocket amounts such as 200 billion KRW and 100 billion KRW.

Now, many fans are once again questioning Bang Si Hyuk's moves as the "father of BTS" after learning of the potentially "unfair distribution of profits" within HYBE. Many also shook their heads at the idea of Bang Si Hyuk's unidentified "affiliates" pocketing substantial profits among themselves while "tossing the BTS members breadcrumbs".

Some netizens commented,

"BTS built HYBE from the ground up, but Bang Si Hyuk gave them 9 billion each and made it so that his friends would pocket 100 billion.."

"This is the fundamental problem of the K-Pop industry. It's essentially an industry that uses young children as pawns to generate huge earnings for greedy old men."

"The members were all still very young in 2020, they were physically and mentally exhausted from their suicidal schedules, and the fans were constantly pressuring them to stay together and renew with HYBE..... there was no way they could have spoken up for themselves in that situation. But to learn that they got those tiny breadcrumbs while people who they probably don't even know pocketed 100 billion won.. Any sense of loyalty they still had toward Bang Si Hyuk must be long gone now."