BTS Founder, Bang Si Hyuk, Going To Jail For Fraud?
- lewishooper1
- 2 minutes ago
- 3 min read
Life imprisonment looms for BTS mastermind Bang Si Hyuk amid $290 million fraud allegations, causing a significant decline in HYBE shares. We take a closer look at what happened and what sentence he is facing!
Who is Bang Si Hyuk?
Bang Si Hyuk is the mastermind behind the global success of BTS! Not only did he help to cement K-pop's place globally, but he is also a veteran songwriter and music producer.
Before finding HYBE, previously known as BigHit, he worked at JYP Entertainment. This wealthy individual and highly influential figure faces criminal charges in Daegu, South Korea.
Bang Si Hyuk under criminal investigation
So the million-dollar question is "Should Bang Si Hyuk go to jail?" Did Bang Si Hyuk pull a fast one back in 2019 when HYBE was still BigHit? This is during the time when investors of the music company were asking about going public. However, at that time, Bang told them that it was not happening, which led some investors to sell their shares.
Investigators on the case have since discovered evidence that Bang was secretly making moves to launch an IPO (public company) anyway, so who is in the right and who is in the wrong here?
The money trail
Where did all of the shares go? Well, it turns out that Bang had a deal taking place in the background with a private investment group, which had a fund set up by someone that he knew well.
Later on, this fund money came in, and priced out all of the shares that the original investors sold. Moving forward to 2020, HYBE, which at the time was known as BigHit, went public, which rightly made investors very mad, but remember, at this time, BTS and other big K-pop groups were dominating global charts.
The share prices skyrocketed, and on the grapevine, it's said that Bang even had a secret agreement, allowing him to get 30% profits from the fund, basically buying cheap shares and then selling them on after the company went public. That secret deal reportedly lined his pockets with a cool $290 million!
What made this illegal?
Good question. Well, the illegal part comes in under the South Korean Capital Markets Act, which is very important for investors, ensuring that they are open about financial agreements, while in the process of filing to make the company public.
If investors are not following this act, it is classed as fraudulent and unfair trading. So to date, the Financial Services are trying to prove that Bang made the original investors sell their shares early, before the company went public, so that his friends could purchase them and Bang could make a profit.
If Bang is found guilty, he will be charged under Article 443 of the act, and if the profit that he earned was higher than 5 billion KRW (It is expected that he profited around 400 billion KRW), the punishment is anywhere from 5 years' jail time or life imprisonment. But will his influence get him off on a lighter sentence?
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