Shares in K-Pop agencies fall after report of antitrust probe

SM Entertainment Co

05/07/2023 02:40

SEOUL, July 5 (Reuters) - Shares in K-Pop management
agencies fell on Wednesday, after South Korea's antitrust
watchdog began investigations into any potential infractions of
subcontracting rules when outsourcing production of albums and
merchandise, Yonhap reported. 
    The Korea Fair Trade Commission (KFTC) sent investigators to
the offices of HYBE  352820.KS , SM Entertainment  041510.KQ 
and YG Entertainment  122870.KQ  on Tuesday, Yonhap news agency
reported citing unnamed industry sources. 
    The KFTC is looking into whether agencies engaged in any
practices with subcontractors such as verbal contracts without
issuing them in writing, unfair contracts or delayed payment,
Yonhap said. No specific charges have been brought. 
    The KFTC declined comment on any specific investigation.
    HYBE, SM and YG did not immediately respond to a request for
comment. 
    Shares in HYBE, the management agency of K-Pop sensation
BTS, fell 2.1% in early morning trade, versus a flat wider
market  .KS11 . SM Entertainment and YG Entertainment shares
also fell 1.5% and 0.4%, respectively, as of 0015 GMT, although
YG later reversed losses. 
    HYBE reported 410.6 billion won ($315.9 million) in
January-March quarter sales; out of that, 44.9% came from albums
and 16.8% from merchandise and intellectual property, according
to a Shinhan Investment & Securities report on Tuesday. 
   
($1 = 1,300.0000 won)

 (Reporting by Joyce Lee; Editing by Jacqueline Wong)
 ((joyce.lee@tr.com;))