Seoul (AFP) – HYBE, the agency behind K-pop superstars BTS, was raided by police on Thursday in connection with alleged fraudulent trading involving its founder Bang Si-hyuk, investigators said. “We are conducting a search and seizure at HYBE’s headquarters in Yongsan District,” Seoul police said in a brief statement.
Bang, the mastermind behind BTS, is under investigation over allegations that he misled early investors to reap illicit profits from the company’s 2020 initial public offering. He is accused of gaining around 200 billion won (US$146 million) through the process, according to local reports. HYBE has denied Bang committed any wrongdoing. “We will dutifully clarify that the listing at the time was carried out in compliance with all relevant laws and regulations,” the company said in early July, pledging “active cooperation” with authorities to get to the bottom of the case.
Bang allegedly misled HYBE’s early investors, who held pre-IPO shares, by telling them in 2019 he had no plans to take the company public. He then allegedly encouraged them to sell their shares to private equity funds when in fact an IPO plan was in the making. HYBE went public in 2020, after the shareholders sold their stakes. The 52-year-old is accused of secretly striking a deal with the private equity funds to receive a portion of the profits they made from selling shares after the IPO.
The investigation comes as all seven BTS members complete their mandatory military service and prepare for a comeback next year. HYBE announced this month that a new album and world tour were scheduled for 2026. BTS, known for championing progressive causes, holds the record as the most-streamed group on Spotify and became the first K-pop act to top both the Billboard 200 and Billboard Artist 100 charts in the United States.
Before their military service, BTS generated more than 5.5 trillion won ($4 billion) in yearly economic impact, according to the Korea Culture and Tourism Institute. That accounts for roughly 0.2 percent of South Korea’s total GDP, according to official data. There had been debate over whether BTS should be granted exemptions from military service—sometimes granted to Olympic medallists and classical artists who win top international awards—but pop stars do not qualify under South Korean laws. With the lack of public consensus on the matter, the members enlisted individually, beginning in late 2022.
© 2024 AFP
