A YouTuber has raised allegations in a press conference that Bang Si Hyuk, chairman of HYBE, used the global K-pop group BTS as collateral to secure hundreds of millions of KRW in unfair gains.
On March 6, in Mapo-gu, Seoul, the YouTuber operating the channel K-Enter BigHit Archive held a press conference with legal representation to disclose what he described as serious illegal activities by Bang in HYBE’s management and capital transactions.
The YouTuber, identified only as A, claimed, “In May 2015, Signal Entertainment Group acquired convertible bonds worth 6 billion KRW (approximately 4.5 million USD), issued by HYBE. At that time, Bang Si Hyuk served both as CEO of HYBE and as an internal director, representing a clear conflict of interest.”
A added, “If Signal had exercised its conversion rights during HYBE’s explosive growth in 2016, it could have secured approximately 31.58 percent of HYBE’s shares, generating profits worth hundreds of billions of KRW, or hundreds of millions of USD. Instead, Signal chose to forgo conversion and only received early repayment of the principal, a highly irrational decision. This strongly suggests a breach of fiduciary duty by Bang to maintain his management control while inflicting substantial damage on both Signal and HYBE.”
The YouTuber further alleged that Bang used BTS to facilitate the alleged breach. “On May 26, 2016, HYBE issued redeemable convertible preferred shares to special purpose entities such as Weblink, guaranteeing 8 percent annual compounded returns. The agreement also included a one-sided clause stating that if any BTS member left the group except in case of death, repayment could be demanded immediately. This is a shocking act of using the company’s core assets, the artists, as collateral to protect Bang’s personal stake and management rights,” he said.
According to A, in 2016, as BTS began achieving global success, HYBE recorded 35.5 billion KRW (approximately 26.5 million USD), in revenue and 10 billion KRW (approximately 7.5 million USD), in operating profit. Despite this growth, HYBE allegedly issued convertible shares under terms favoring Weblink rather than raising investment under ordinary conditions.
A also claimed, “HYBE issued the shares under unfavorable conditions to remove the threat to Bang’s management from Signal, which held 31 percent of convertible bonds. As a result, Bang allegedly caused irreparable damage to minority shareholders while providing Weblink the opportunity to gain billions of KRW in market profits.”
Bang is also accused of misleading investors, including venture capitalists, by claiming HYBE had no plans for an initial public offering and then selling shares to a private equity fund established by an associate. Investors trusted Bang’s claim and sold their shares while HYBE was reportedly preparing IPO procedures in parallel. Bang allegedly shared 30 percent of the profits from these transactions but did not disclose it in HYBE’s securities filings. Following the IPO, the fund sold large volumes of HYBE stock, with Bang reportedly netting roughly 200 billion KRW (approximately 150 million USD), in gains.
Fraudulent transactions of this nature can carry prison terms of at least five years or life imprisonment if the profit or avoided loss exceeds 5 billion KRW (approximately 3.7 million USD). Fines can range from three to five times the illicit gains. If the total 400 billion KRW (approximately 300 million USD), of alleged illicit profits is considered, fines could reach at least 1.2 trillion KRW (approximately 900 million USD).
Recently, Bang reportedly gifted 711,534 HYBE shares, representing 1.65 percent of the company, worth roughly 270 billion KRW (approximately 200 million USD). HYBE confirmed it will acquire 546,120 of these shares as treasury stock without additional cash outlay, with the remaining 165,414 shares gifted to another individual. Bang’s ownership will decrease from 30.55 percent to 28.90 percent while retaining his status as the largest shareholder. HYBE stated that the gift is intended to fund employee performance rewards.
Addressing criticism over the timing of the allegations ahead of BTS’s full-group comeback, A said, “I have no intention of interfering with BTS’s activities. My sole purpose is to ensure a thorough investigation of Bang Si Hyuk’s actions.”
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