The Financial Supervisory Service (FSS) is investigating allegations of fraudulent trading against Bang Si-hyuk, the founder of HYBE.
According to the financial investment industry on the 28th, the FSS has secured evidence that Chairman Bang misled shareholders by claiming there were no plans for an Initial Public Offering (IPO) during the listing process and is investigating under the Capital Markets Act for fraudulent trading.
Before HYBE's listing in 2020, Chairman Bang entered into a contract to share 30% of the profits from the sale of shares with a private equity fund (PEF) established by an acquaintance, receiving about 400 billion won after the listing. This contract was not disclosed in the securities registration statement.
These private equity funds purchased HYBE shares from existing investors, including institutional investors and venture capitalists (VCs).
The problematic period is late 2019, during which the FSS has reportedly secured evidence that Chairman Bang's side communicated to existing investors that a listing was currently impossible while applying for a designated audit and pushing for the IPO.
If Chairman Bang's illegal activities are confirmed, it is expected that he will face significant penalties. Financial authorities are said to be planning a strict response considering the impact and symbolism on the capital market.
An FSS official stated regarding the matter, "We cannot confirm individual cases," taking a cautious stance.
