BTS and HYBE's IPO: Bang Si-hyuk's 400 Billion Won Secret Deal Controversy

The revelation that HYBE founder Bang Si-hyuk earned approximately 400 billion won through HYBE's IPO in 2020 has sparked controversy. This profit was achieved through a private agreement with private equity funds (PEFs) before the IPO, which was not disclosed during the IPO process.

Secret Deal Between Bang Si-hyuk and PEFs

• Details of the Agreement: Bang Si-hyuk entered into shareholder agreements with private equity firms such as Stick Investment, Eastone Equity Partners, and New Main Equity. The contract stipulated that if HYBE successfully went public, Bang would receive about 30% of the capital gains from the PEFs' share sales.
• IPO Outcome: HYBE successfully went public in October 2020, and it is estimated that Bang Si-hyuk received approximately 400 billion won from these PEFs.

Controversy and Regulatory Response

• Issue of Undisclosed Agreement: This agreement was not disclosed in the Korea Exchange's listing review or in the Financial Supervisory Service's securities report. It has been criticized as an unusual case where a major shareholder secured personal profits before an IPO.
• Regulatory Investigation: The Financial Supervisory Service and the Korea Exchange are reviewing whether this issue warrants legal action. So far, HYBE has maintained that there were no violations of laws.

Impact on BTS

BTS is a major artist under HYBE and significantly influences the company's revenue and stock price. However, there is no evidence that this incident directly affects BTS's activities or earnings. Nonetheless, issues regarding financial transparency and managerial ethics at HYBE could indirectly impact the artists and the company's image.This incident raises concerns about financial and ethical transparency related to HYBE, potentially leading to trust issues across the company. While there is no direct link to BTS, the impact on the company's image cannot be overlooked.

 

 

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