Did BTS's boss get into big trouble right after their return from military service? HYBE founder Bang Si-hyuk is suspected of improper trading, gaining 400 billion won.

According to reports, Bang Si-hyuk, the founder of HYBE Entertainment and the boss of the world-class KPOP boy group BTS, has recently come under scrutiny by the South Korean Financial Supervisory Service. This primarily stems from inquiries made by investors about potential listing plans during the Big Hit era. Bang Si-hyuk had stated that relying solely on BTS was not enough, and he hoped to wait until other artists were developed before going public. Unexpectedly, a year after Bang Si-hyuk denied any listing plans, HYBE went public. At that time, investors sold their stocks to HYBE-affiliated funds, which profited 1.2 trillion won (approximately 25.4 billion TWD).

During the Big Hit era, investors inquired about listing plans but were denied by Bang Si-hyuk.

HYBE Group was formerly known as Big Hit Entertainment, founded by producer Bang Si-hyuk. Big Hit broke the dominance of YG, JYP, and SM in the Korean entertainment industry by acquiring smaller companies and expanding its artists, and in 2021, it rebranded as HYBE, keeping Big Hit as its label.

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It is understood that as early as the Big Hit era, investors inquired about potential listing plans. At that time, Bang Si-hyuk stated that relying solely on BTS was not enough and hoped to wait until TOMORROW X TOGETHER (another boy group under Big Hit) and other artists were developed before going public.

Bang Si-hyuk profited 400 billion won from this.

Investors at that time believed that their paper profits had more than doubled and decided to cash out their stocks. These investors' stocks were bought by a private equity fund, and a year after Bang Si-hyuk told investors there were no listing plans, HYBE went public. After the IPO, the private equity fund sold the stocks and made a profit of 1.2 trillion won (approximately 25.4 billion TWD).

More alarmingly, two individuals related to HYBE were involved in the private equity fund. The contract Bang Si-hyuk signed with the fund included a clause for 'sharing 30% of the investment profits', indicating he could earn up to 400 billion won (approximately 8.5 billion TWD) from this transaction.

Reports indicate that these actions were not disclosed in HYBE's securities declaration, leading to accusations of fraudulent and improper trading under the Capital Markets Act. Many believe that since HYBE's investors are involved with the National Pension, this matter has turned into an issue concerning the entire nation.

From the timeline perspective, was BTS and TXT too successful, or was it Bang Si-hyuk's insider trading?

The author has compiled the currently disclosed information and organized the timeline. HYBE went public on October 15, 2020, indicating that investors inquired about listing plans around October 2019, a year after Bang Si-hyuk told them there were no plans.

In November 2019, BTS won the awards for Tour of the Year, Favorite Duo or Group, and Favorite Social Artist at the 2019 American Music Awards. In December 2019, BTS took home four major awards at the Melon Music Awards and Mnet Asian Music Awards, becoming the only Korean artist in history to sweep both the Digital Album of the Year and Album of the Year at the 34th Golden Disc Awards.

In February 2020, BTS released the album (Map of the Soul: 7), and within just 9 days, sales exceeded 4.1 million. In March 2020, BTS became the first Korean artist to have cumulative album sales surpassing 20 million, making the group the best-selling artist in Korean history.

On April 20 of the same year, during a shareholders' meeting, Bang Si-hyuk was appointed as the chairman of the board and the sole representative director. On May 25, it announced the acquisition of PLEDIS Entertainment, and on August 3, in order to strengthen long-term partnerships with key artists and boost morale, it granted a total of 478,695 shares of Big Hit common stock to the seven members of BTS.

On October 21, 2019, Big Hit's rookie boy group TXT returned with their first studio album (The Dream Chapter: MAGIC), and the next day they topped the iTunes charts in 25 regions worldwide, setting the highest record for a rookie group in Korea.

Whether the entire incident was insider trading or if HYBE saw the success of BTS and TXT and decided to go public depends on the judgment of the Financial Supervisory Service.

This article discusses whether BTS's boss got into big trouble right after they returned from military service? Bang Si-hyuk, the founder of HYBE, is suspected of improper trading, gaining 400 billion won, originally published in Chain News ABMedia.