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Allegations that Bang Si-hyuk, chairman and founder of HYBE, engaged in fraudulent practices during the company’s IPO are fueling fears of an industry-wide credibility crisis. Observers say the scandal exposes deep structural flaws in the K-pop business and highlights the urgent need for improved corporate governance and transparency in major entertainment agencies.

Industry insiders view the controversy as a reflection of underlying issues in the K-pop ecosystem. With the genre heavily reliant on global fandoms and foreign investment, investor trust has become more crucial than ever. Yet, many leading K-pop companies—including HYBE—still operate under founder-centric management structures, making internal checks and balances difficult to enforce. Experts argue that the current situation stems from a lack of proper oversight mechanisms.

While K-pop was once celebrated primarily for its cultural influence, its global expansion has shifted the conversation to include discussions about industry structure and corporate operations. Cultural critic Jung Deok-hyun pointed to HYBE’s public dispute with former ADOR CEO Min Hee-jin as a recent example that exposed cracks in HYBE’s label-based management system. “As companies grow into global enterprises, their structural flaws are also brought to light much faster,” he said.

In today’s K-pop market, agencies that fail to meet the expectations of global fandoms risk losing their support. Some are warning that the current crisis may affect not just HYBE but the credibility of the K-pop industry as a whole. Calls are growing for this incident to be seen as a wake-up call—a signal of a broader “systemic crisis” in K-pop.

Jung emphasized, “People are beginning to question whether these companies are operating under global governance standards. The industry may have expanded, but many agencies still fall short in areas like profit structure and overall management. It’s time to overhaul the system and adopt governance models that meet international standards.”