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Tuesday, May 21, 2024

BTS agency employees accused of insider trading

In a YouTube video posted on June 14 last year, BTS' band members told fans they were taking a break from the supergroup to focus on their solo careers, citing exhaustion and the pressures of their stratospheric success.

Three employees at HYBE, the agency behind K-pop megastars BTS, have been accused of insider trading by South Korea’s financial watchdog over share sales before the group’s bombshell “hiatus” announcement.

In a YouTube video posted on June 14 last year, BTS’ band members told fans they were taking a break from the supergroup to focus on their solo careers, citing exhaustion and the pressures of their stratospheric success.

Read more: K-pop megastars BTS to release memoir in July

The company’s share price fell nearly 25 percent when the market opened the day after the announcement, wiping nearly 2 trillion won ($1.5 billion) off its value.

Three HYBE employees, whose identities have been withheld, had prior knowledge of the announcement and sold their shares before it was made public, pocketing hundreds of millions of won illegally, the Financial Supervisory Service said in a statement Wednesday.

“We referred the three officials, one of whom is a team leader, to the prosecution with the opinion that they should be indicted,” the watchdog said.

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The watchdog also criticised HYBE for making the market-moving announcement in a YouTube video rather than an official statement or regulatory filing, which they said had “aggravated investors’ confusion”.

Entertainment agencies should have a system where important information for investors is made public “transparently and through a right channel”, it said.

While BTS cited exhaustion as a reason for its decision to suspend group activity, many analysts said the hiatus was strategic, with South Korea’s mandatory 18-month military service looming for individual band members.

All South Korean able-bodied men under the age of 30 must perform around two years of military service, mainly because the country remains technically at war with nuclear-armed North Korea.

Two of the celebrity septet’s members, Jin and J-Hope, enlisted in the army in December 2022 and April this year respectively, with the remaining five expected to follow in the years — or months — ahead.

HYBE did not respond to an AFP request for comment.