Financial authorities are deciding on the level of sanctions against Bang Si-hyuk, Chairman of HYBE, who is suspected of fraudulent trading under the Capital Markets Act.
According to financial authorities on the 16th, the Securities and Futures Commission (SFC) of the Financial Services Commission will hold a regular meeting today to determine the level of sanctions against Chairman Bang.
Previously, the Capital Market Investigation Review Committee, which is the deliberative body of the SFC, held a meeting on the 7th and decided to report Chairman Bang to the prosecution, forwarding related opinions to the SFC. Meanwhile, it is reported that Chairman Bang intends to refuse the opportunity to explain provided by the authorities.
This is interpreted as Chairman Bang focusing on providing an explanation during the prosecution investigation stage.
Chairman Bang appeared before the Financial Supervisory Service at the end of last month to be investigated regarding the current allegations. Additionally, HYBE stated, “We are actively cooperating with the financial authorities and police in verifying the facts by submitting detailed explanations and related materials regarding the issues currently raised.”
He emphasized, “Even if it takes some time, we will thoroughly explain that the listing was conducted in compliance with laws and regulations.”
The SFC is an independent deliberative body under the Financial Services Commission that decides on administrative sanctions such as fines and penalties, as well as whether to report to investigative agencies for criminal prosecution.
According to financial authorities, Chairman Bang contracted to share 30% of the profits from the sale of shares with a private equity fund established by an acquaintance before HYBE's listing in 2020, and received about 400 billion won after the listing.
The authorities believe that Chairman Bang falsely informed existing investors such as institutional investors and venture capitalists that the listing was impossible, leading them to sell HYBE shares to the acquaintance's private equity fund.
Additionally, the contract between Chairman Bang and the private equity fund was omitted during the listing review process by the Korea Exchange and the submission of the securities report to the Financial Supervisory Service, which has been pointed out as causing harm to early investors who purchased HYBE shares without this information. It is understood that if investors had continued to hold those shares, they could have made sufficient profits.
Financial authorities believe that Chairman Bang mobilized the private equity fund to circumvent the lock-up period (which prevents major shareholders or executives from selling shares for a certain period after listing).
