Bang Si Hyuk’s $300 million insider trading investigation generates renewed curiosity in the …

Recently, reports emerged that South Korea’s Financial Supervisory Service is looking into HYBE Labels chairman Bang Si Hyuk for potential insider trading. The investigation centers around allegations that Bang Si Hyuk misled existing shareholders in 2019 by providing false information about HYBE’s plans to go public. Subsequently, he persuaded these shareholders to sell their shares to his private equity fund management company just before HYBE’s initial public offering in October 2020. Bang Si Hyuk had previously signed a contract with this fund, promising him 30% of all profits generated through HYBE’s public listing. As a result of this agreement, he received a significant payout of 400 billion KRW, equivalent to around $300 million USD.

The Financial Supervisory Service suspects that Bang Si Hyuk may have engaged in illegal insider trading by deceiving existing shareholders, prompting a review of the case before it moves to the prosecutor’s office for further investigation. This news has reignited interest and backlash from fans of BTS, the group largely responsible for HYBE’s remarkable success.

Prior to this investigation, it was disclosed that Bang Si Hyuk allocated approximately 68,000 shares to each of the seven BTS members (totaling 480,000 shares) before HYBE’s public listing in 2020. At the time, these shares were valued at approximately 64.6 billion KRW ($6.7 million USD) per member. In 2021, three members, Jin, j-hope, and RM, sold a portion of their shares, earning 4.8 billion KRW, 1.8 billion KRW, and 3.1 billion KRW, respectively. It remains unclear whether the other BTS members still retain their shares in HYBE, as their statuses transitioned from public to private shareholders post-September 2023.

If the BTS members have retained their shares, based on last year’s stock prices, each member could have profited 15 billion KRW ($11 million USD) from the shares gifted by Bang Si Hyuk. These earnings pale in comparison to the substantial profits reaped by Bang Si Hyuk (400 billion KRW) and other associates linked to him, some of whom purportedly pocketed amounts like 200 billion KRW and 100 billion KRW.

Following this revelation, fans have raised questions about the equity distribution within HYBE and the discrepancy in profits earned by various stakeholders. Criticism has been directed at Bang Si Hyuk for allegedly favoring his affiliates over the BTS members, characterizing it as an unfair allocation of earnings. Netizens have expressed disappointment and frustration, highlighting the disparity between the BTS members’ contributions to HYBE’s success and the perceived inadequate compensation they received in return. Calls for the group to part ways with HYBE and vocal criticism of Bang Si Hyuk’s leadership decisions have circulated online.

As the investigation unfolds, with prosecutors raiding HYBE headquarters in connection to the insider trading probe, the scrutiny on Bang Si Hyuk and the distribution of profits within the company intensifies. This development has sparked a wave of reactions from fans, signaling a potential shift in sentiment towards the management of BTS and the entertainment conglomerate they are affiliated with.