HYBE’s Chairman Bang Si Hyuk has found himself at the center of controversy following allegations that he secretly took 400 billion won before HYBE’s IPO.
The claims came after a report by Korea Economic Daily titled, "Bang Si Hyuk Took 400 Billion Won Separately… 'The Secret of HYBE’s IPO' from Four Years Ago."
On November 29th, HYBE responded with an official statement titled “Clarification on Rumors or Reports” to address the claims. HYBE’s CFO, Lee Kyung Jun, clarified that the company had followed all legal procedures during the IPO process.
He explained, “We provided the shareholder agreement to the IPO underwriters, who reviewed the agreement in accordance with IPO-related laws. There were no violations of laws during the IPO process.”
The initial report from Korea Economic Daily alleged that Bang Si Hyuk personally earned around 400 billion won during HYBE's IPO in 2020. It was claimed that Bang had signed shareholder agreements with Stick Investment, Easton Equity Partners, and New Main Equity.
These agreements reportedly allowed him to receive around 30% of the profits from the sale of shares by these private equity firms after the IPO. Additionally, the report stated that if the IPO failed, Bang had agreed to repurchase the shares.
Such agreements, where major shareholders personally benefit before an IPO, are rare, and the report pointed out that this arrangement was not mentioned in official filings, such as the Korea Exchange’s listing review or the Financial Supervisory Service’s securities registration statement.
While the company deals with these allegations, HYBE is also handling legal challenges after NewJeans, an artist under its subsidiary label ADOR, announced they would terminate their exclusive contract.
HYBE confirmed the news, stating, "We have received a notification from our subsidiary ADOR that NewJeans will terminate their contract with us effective from midnight on the 29th. We will respond appropriately and make a public announcement regarding the decision soon."
Source: [1]
