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Saturday, September 30, 2023

K-Pop Agencies Rocked by Antitrust Investigation, Stock Prices Plunge

Shares of production agencies k-pop (Korean pop, popular music direction) fell in stock trading on Wednesday, July 5, after the South Korean antitrust authority launched an investigation into possible violations of subcontracting rules in the production of music albums and branded goods for outsourcing. This was reported by Reuters, citing information from South Korea’s largest agency, Yonhap.

South Korea’s regulator, the Korea Fair Trade Commission (KFTC), sent investigators to the offices of music agencies HYBE (352820.KS), SM Entertainment (041510.KQ) and YG Entertainment (122870.KQ) on Tuesday, Yonhap reported, citing industry sources. These are the major management agencies of South Korean k-pop bands.

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South Korean conglomerate HYBE is a multi-label entertainment company that is the manager of the popular k-pop group BTS. The company was previously called Big Hit Entertainment, but in the spring of 2021, it announced that it was changing its brand to HYBE.

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According to Yonhap, the KFTC will investigate whether South Korean production agencies used verbal contracts with subcontractors without their written registration, whether they entered into unfair contracts or delayed payment for services performed. No specific charges have yet been brought against the production agencies.

As a result of trading in Korea, shares of HYBE fell by 2%, SM Entertainment – by 1%. Shares of YG Entertainment during trading compensated for losses and closed with an increase of 1.61%. The South Korean KOSPI index fell by 0.55% to 2579 points.

Since the beginning of 2023, YG Entertainment’s shares have grown by more than 87%, HYBE by 62%, and SM Entertainment by 41%.

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