The Financial Supervisory Service (FSS) has summoned Bang Si-hyuk, chairman of HYBE, for questioning regarding allegations of violating the Capital Markets Act. It has been confirmed that this investigation relates to purported fraudulent activities in financial transactions.
According to sources within the entertainment industry on July 3, Bang Si-hyuk appeared for questioning at the FSS late last month. He is accused of misleading existing investors by falsely stating that there were no plans for an initial public offering (IPO) of HYBE, and subsequently selling shares to a private equity fund (PEF) managed by an acquaintance.
During the time in question, HYBE was reportedly in the process of preparing for a public listing, including crucial steps like applying for a designated auditor. Investors, trusting Bang's assertion that there were no IPO plans, sold their shares and ultimately missed out on potential profits when the company went public.
Additionally, Bang allegedly entered into an agreement with the PEF to share 30% of the profits from the share sale, resulting in an estimated gain of approximately 400 billion won. However, he is also under suspicion for failing to disclose this arrangement in HYBE's securities report, leading to allegations of false disclosures.
The FSS is considering Bang's actions as "fraudulent trading" under the Capital Markets Act. They are reviewing the relevant materials to decide whether to refer the case to the Securities and Futures Commission or pursue criminal charges through the prosecution.
The investigation into Bang is being conducted concurrently by the FSS and police authorities. The Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency has recently filed two requests for search warrants with the prosecution, but both were denied by the Seoul Southern District Prosecutors’ Office.
HYBE has stated that they are "fully cooperating with the investigation."
