K-Pop’s Heavyweights Under Fire: Legal Woes for Industry Titans

As K-pop braces for what could be a golden era of global resurgence — fueled by the highly anticipated return of BTS and Blackpink — its biggest threat may not be foreign competition, but the moguls within. All heads of the so-called “big four” K-pop agencies, except for JYP Entertainment’s Park Jin-young, are currently embroiled in legal cases.

Bang under IPO probe
Hybe Chairman Bang Si-hyuk is making headlines for all the wrong reasons.

Despite his limited public appearances, Bang continues to attract outsized attention. A video of him walking with a young female streamer in Beverly Hills last July went viral — but that was just the tip of the iceberg.

Bang is now under investigation by South Korea’s Financial Supervisory Service for alleged pre-IPO misconduct. He’s suspected of misleading early investors by claiming Hybe (then Big Hit Entertainment) had no plans to go public, while secretly arranging share sales to a private equity fund linked to an associate.

The deal reportedly generated massive profits, with a portion potentially lining Bang’s pockets, raising red flags for securities fraud. In June, the case was handed over to prosecutors for potential criminal charges.

Hybe has vehemently denied any wrongdoing, insisting that it never concealed its IPO plans and that both listing and investment options were openly discussed with investors. The company maintains that former shareholders sold their stakes based on their own judgment, fully aware of the company’s strategic direction.

In a separate but equally high-profile case, Bang has been called as a witness in a stock manipulation trial involving Kakao’s 2023 takeover battle for SM Entertainment. While not a suspect, he’s expected to testify about his role in behind-the-scenes negotiations during the high-stakes acquisition. However, Bang’s no-show in court on Tuesday has raised eyebrows, fueling speculation about his level of involvement and commitment to transparency.

YG Entertainment’s Executive Producer Yang Hyun-suk found himself in hot water on June 4, appearing in a Seoul court to face charges of violating the Act on the Aggravated Punishment of Specific Crimes related to customs evasion.Yang is accused of smuggling two luxury Swiss watches, worth 241 million won ($176,000), into Korea without declaring them. He allegedly received the timepieces as gifts in Singapore back in 2014.

Yang’s defense? That celebrity sponsorships are par for the course in the industry. But this claim hit a snag when a representative from the watch brand testified that all official endorsements must get the green light from the brand’s Swiss headquarters, and that gifting to celebrities is strictly off-limits.

Yang’s legal team fired back, arguing that the details of when and where the watches were received remain murky, pointing to inconsistent statements from the brand’s regional executive.

EXO members sue SM executives

Over at SM Entertainment, co-CEO Tak Young-jun and Chief A&R Officer Lee Sung-soo are facing the music in a fraud lawsuit. Three members of EXO — Chen, Baekhyun and Xiumin, collectively known as CBX — have accused them of violating the Act on the Aggravated Punishment of Specific Economic Crimes.

The trio claims the executives withheld transparent payment records and enforced excessively long-term contracts, leading them to seek termination of their exclusive agreements in mid-2023.While the dispute seemed to cool off when the members agreed to continue EXO-related group activities under SM Entertainment, tensions flared up again months later over solo promotion revenue distribution.

The plot thickened when Baekhyun’s independent label INB100 — which also manages Chen and Xiumin — joined forces with One Hundred Label. SM Entertainment cried foul, accusing the artists of tampering and engaging in unauthorized outside negotiations.

In a tit-for-tat move, CBX filed a criminal complaint against Tak and Lee, accusing them of manipulating royalty payments. SM Entertainment countered with a civil lawsuit demanding the artists honor their original contracts. Both cases are currently playing out in court, with the K-pop industry watching closely.