HYBE’s founder and chairman, Bang Si-hyuk, told employees in a leaked internal email that he plans to return to Seoul to face authorities investigating allegations of securities fraud connected to the company’s 2020 initial public offering.
In an email to employees Wednesday (August 6), which was obtained by Forbes and The Korea Herald, Bang acknowledged that his extended absence abroad may have contributed to “confusion and frustration” within the company.
Bang wrote: “Over the last year, much has been said and written about me in the press. Increasingly, I believe these events are causing confusion and concern for you, as well as our artists, fans, and partners.”
The executive has been in the US overseeing business, and has been focused on BTS’ reunion and other HYBE artists outside Korea, according to Forbes, which cited source with connections to the company.
Bang told staff: “I will return to Korea to fully and transparently work with investigators and put these allegations to rest.”
“Over the last year, much has been said and written about me in the press. Increasingly, I believe these events are causing confusion and concern for you, as well as our artists, fans, and partners.”
Bang Si-Hyuk, HYBE
He added: “In particular, I feel a deep sense of regret knowing that our members and artists, who should be focused solely on their creative and professional goals, might be suffering because of this situation.”
As MBW previously reported, Bang and three other executives at the company have been referred to prosecutors in an investigation of alleged “unfair trading” in connection with the company’s IPO.
According to Korea Economic Daily, regulators are probing whether Bang enriched himself unjustly by misleading HYBE investors, including venture capital firms, into believing that the company’s 2020 IPO would be delayed.
Regulators stated that the IPO plans were actually on track, with HYBE even hiring an auditor. However, investors, believing there would be a delay, reportedly sold their shares to a special purpose company supported by HYBE’s executives.
“I will return to Korea to fully and transparently work with investigators and put these allegations to rest.”
Bang Si-Hyuk, HYBE
This company sold its shares after the IPO, and Bang allegedly pocketed 30% of the profits, or around 190 billion won (USD $137 million at the current exchange rate), regulators say.
That’s a somewhat lower figure than the 400 billion won that had been previously reported.
According to The Korea Herald, fraudulent trading that generates profits or prevents losses exceeding 5 billion won can result in sentences ranging from five years to life imprisonment.
Bang reportedly told staff in his new email: “I care deeply for what we do and have immense respect for everyone at HYBE who has worked tirelessly to elevate K-pop and Korea’s place in global culture. It’s extremely unfair that these events should overshadow your efforts.”
Shares of HYBE were up nearly 7% in Seoul trading late Thursday afternoon (August 7).
On Wednesday (August 6), HYBE reported a 10.2% YoY jump in Q2 revenue to 705.6 billion South Korean won ($507.5m), while operating profit jumped 29% YoY to 65.9 billion won ($47m).
You can read Bang’s full email, as reported by The Korea Herald, below:
To the HYBE team
Over the last year, much has been said and written about me in the press. Increasingly, I believe these events are causing confusion and concern for you, as well as our artists, fans, and partners.
As founder and chairman, I feel a deep sense of responsibility to do everything in my power to ensure nothing takes away from the hard-earned attention and praise your work continues to receive. I care deeply for what we do and have immense respect for everyone at HYBE who has worked tirelessly to elevate K-pop and Korea’s place in global culture.
It’s extremely unfair that these events should overshadow your efforts. That’s why I will return to Korea to fully and transparently work with investigators and put these allegations to rest.
HYBE was the starting point of a journey to realize my ideals and dreams as a creator. From the beginning, we sought to create an environment where creatives and artists could fully express their unique voices and freely pursue their dreams.
What began as a simple hope has become the foundation for artists, creators, and so many others in the industry. I’m deeply grateful that this dream has resonated with people everywhere. That’s why these past few months have been so painful.
I’ve tried to remain cautious with my words out of respect for ongoing legal proceedings, yet it has been difficult not to respond to these allegations. While I’ve instead focused on supporting BTS and other HYBE artists and advancing key business opportunities overseas, my continued time abroad has been prolonged. I understand how my absence may have contributed to confusion and frustration.
By returning to Korea, it will be easier for me to fully cooperate with authorities to address these allegations and alleviate any stress or anxiety these events have caused our community. In particular, I feel a deep sense of regret knowing that our members and artists, who should be focused solely on their creative and professional goals, might be suffering because of this situation.
I am committed to a swift resolution to these matters, so that you may focus on what you do best: creating and sharing entertainment and culture that resonates around the world.
While I navigate these events at home, I want to express my infinite appreciation to all of you at HYBE who have continued to produce only the highest quality work. Our team’s devoted efforts, our creators’ passion, and our artists’ talent are HYBE’s most powerful growth engine and the bedrock that sustains our company.
Your work is what carries HYBE forward. Thank you for giving your best every day—I will do the same.
Sincerely,
Chairman Bang
Music Business Worldwide
