HYBE founder and chairman Bang Si Hyuk reportedly earned approximately 400 billion KRW ($300 million USD) from HYBE’s 2020 initial public offering (IPO), according to The Korea Economic Daily. The report, published on November 29th, revealed details of a shareholder agreement that had previously gone undisclosed.
At the time of the IPO, Bang had agreements with private equity funds (PEFs) STIC Investments, Estone Equity Partners, and New Main Equity. These agreements allowed Bang to receive approximately 30% of their sale profits after the IPO. Additionally, Bang had agreed to repurchase their shares if the IPO failed to occur within a set timeline.
STIC Investments owned 12.2% of HYBE shares pre-IPO, while Estone and New Main Equity held 11.4%. The funds reaped massive profits following HYBE’s IPO in October 2020. STIC Investments, for example, reportedly turned an initial investment of 103.9 billion KRW ($77 million USD) into a return of 961.1 billion KRW ($715 million USD). Estone and New Main Equity also recorded substantial gains from their respective 125 billion KRW ($93 million USD) investments.
While the PEFs celebrated their windfalls, Bang Si Hyuk personally received nearly 400 billion KRW ($300 million USD) as part of his agreement. According to industry insiders, this type of private profit-sharing arrangement between a major shareholder and PEFs is highly unusual. The Korea Exchange and Korea’s Financial Supervisory Service were reportedly unaware of the arrangement during HYBE’s listing review, as the deal was not disclosed in regulatory filings.
HYBE’s stock saw a meteoric rise on its first day of trading, opening at 351,000 KRW ($260 USD) per share. However, the stock plummeted by 60% within a week, leading to public scrutiny. HYBE defended its actions, stating, “The underwriters and four legal advisory firms all concluded that this was a private agreement between specific shareholders and that it did not affect general shareholders financially. Therefore, disclosing in the securities filing was not deemed necessary.”
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