HYBE Corporation Chairman Bang Si-hyuk is at the center of controversy following reports that he earned an additional 400 billion won from a "secret agreement" with private equity funds (PEFs) during the company's 2020 IPO. This revelation has raised concerns about the transparency and ethics of such arrangements.
HYBE's IPO under scrutiny
In October 2018, STIC Investments acquired 3.46 million shares of HYBE, formerly Big Hit Entertainment. When the company went public in October 2020, the IPO generated significant profits for the PEFs. On HYBE's first day of trading on the Korea Exchange, the stock surged 150% from the initial offering price, although it later fell by 60% due to profit-taking.
Bang Si-hyuk secret 400B won deal revealed
PEFs held a 23.6% stake in the company, with 15.1% of their shares excluded from lock-up restrictions, allowing them to sell shortly after the listing. They reportedly sold 4.99% of their shares in the first few days, earning 425.8 billion won. Later, in December 2020 and July 2021, STIC Investments sold additional shares through block deals.
According to the investment banking industry, Bang had signed agreements with STIC, Eastone Equity Partners, and Neumain Equity before the IPO. These agreements included a clause to share 30% of the profits from successful sales, a detail that was not disclosed during the IPO, reportedly earning Bang approximately 400 billion won.
