Staff Writer
South Korea’s financial watchdog has charged three workers of HYBE, the company that represents K-pop megastars BTS, with insider trading for share sales made before to the group’s shocking “hiatus” announcement.
BTS band members announced to fans in a June 14 YouTube video that they were leaving the supergroup to concentrate on their solo projects due to weariness and the demands of their enormous popularity.
The day after the news, the company’s stock price dropped by almost 25%, erasing nearly 2 trillion won ($1.5 billion) from 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.
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”.
An advocate for transparency and proper communication in the entertainment industry has proposed the implementation of a system where crucial information for investors is publicly disclosed through appropriate channels.
Although BTS cited exhaustion as the reason for their decision to temporarily suspend group activities, analysts have speculated that the hiatus is a strategic move due to the approaching mandatory 18-month military service for individual band members in South Korea.
The requirement for military service stems from the ongoing technical state of war between South Korea and North Korea, which necessitates that all able-bodied men under the age of 30 serve approximately two years in the military.
Two members of the popular septet, Jin and J-Hope, have already enlisted in the army in December 2022 and April of this year respectively. The remaining five members are expected to follow suit in the coming years or months.
