Three employees at Hybe, the agency behind K-pop megastars BTS (pic), have been accused of insider trading by South Korea’s financial watchdog over share sales before the group’s bombshell “hiatus” announcement.
In a YouTube video posted in June 2022, the seven members of BTS said they were taking a break from group activities to focus on their solo careers, citing exhaustion and the pressures of their stratospheric success.
The company’s share price fell nearly 25 per cent when the market opened the day after the announcement, wiping nearly 2 trillion won off its value.
Three Hybe employees, whose identities have been withheld, had prior knowledge of the announcement and sold their shares before it was made public, pocketing hundreds of millions of won illegally, South Korea’s Financial Supervisory Service said in a statement last Wednesday.
“We referred the three officials, one of whom is a team leader, to the prosecution with the opinion that they should be indicted,” said the watchdog.
It also criticised Hybe for making the market-moving announcement in a YouTube video rather than an official statement or regulatory filing, which it said had “aggravated investors’ confusion”.
Entertainment agencies should have a system where important information for investors is made public transparently and through a right channel, it said.
While BTS cited exhaustion as a reason for their decision to suspend group activities, many analysts said the hiatus was strategic, with South Korea’s mandatory 18-month military service looming for individual band members.
All South Korean able-bodied men under the age of 30 must perform about two years of military service, mainly because the country remains technically at war with North Korea.
Two of the septet’s members, Jin and J-Hope, enlisted in the army in December 2022 and April 2023 respectively, and the remaining five are expected to follow in the years – or months – ahead.
Hybe did not respond to a request for comment. – AFP