SEOUL: Hybe founder and chair Bang Si-hyuk, once celebrated as the trailblazer of the K-pop industry with the unprecedented success of BTS, now finds himself under intense legal scrutiny, putting Hybe’s roughly 12 trillion won market valuation to the test.
According to the allegations, Bang deliberately misled investors in 2019 by suggesting that the public listing of Hybe – then Big Hit Entertainment – would be unlikely, while the company was preparing to go public as planned in the back.
He is accused of unfair trading, pocketing roughly half of the 400 billion won generated in proceeds.
Bang, who had remained mostly silent throughout the process, sent an official statement to Hybe employees, shortly before returning to South Korea from the United States on Aug 11.
“Having already provided a detailed explanation regarding the circumstances behind the listing during the previous probe carried out by the financial regulators, I will continue to explain the matter once again in full,” the statement read.
“I expect that this process will help clarify the facts, and I will humbly await the authorities’ decision.”
As President Lee Jae Myung pushes his “one-strike” policy in a declared war against stock manipulation, Bang has emerged as a prime example of its enforcement, with authorities competing to take the lead in pressuring him.
On July 16, the Financial Supervisory Commission, the nation’s top financial regulator, referred the case to prosecutors, the strongest measure the agency can take.
Meanwhile, police have intensified their crackdown, raiding the agency’s headquarters as well as the Korea Exchange.
The National Tax Service has also launched a sweeping probe into Hybe, deploying its special bureau that handles large-scale tax evasion cases.
Industry officials noted that it is highly unusual for all major state investigative bodies, including the police, financial regulators, prosecutors and the NTS, to simultaneously target a single company, highlighting the extraordinary scope of the investigation.
Though still at an early stage, the criminal charges against Bang could trigger upheaval in Hybe’s shareholder structure.
In recent years, major investors have steadily pared back their holdings in the K-pop powerhouse amid a series of public setbacks, including its feud with former Ador chief executive officer and producer Min Hee-jin.
Bang is the largest shareholder of the Kospi-listed company, holding a 31.57%, followed by game developer Netmarble at 9.44%, the National Pension Service at 7.8% and crypto exchange operator Dunamu at 5.53%.
Although the NPS remains one of Hybe’s largest shareholders, it had trimmed its stake by more than one percentage point in June 2024.
A month earlier, Netmarble offloaded Hybe shares amounting to 2.6 percentage points.
While the game developer explained the sale as a move to secure liquidity and offset operating losses, industry watchers pointed instead to escalated volatility in Hybe’s valuation, challenged by its dispute with Min. — The Korea Herald/ANN
