HYBE is currently under tax investigation by the National Tax Service for allegedly deceiving investors to gain unjust profits during its IPO process. Recently, Bang Si-hyuk, Chairman of HYBE's Board of Directors, was also reported to have been formally accused of the same charges.
On July 29, the Fourth Investigation Division of the Seoul Regional Tax Office dispatched staff to HYBE's headquarters in Yongsan-gu, Seoul, to secure documents necessary for the tax investigation. Meanwhile, the Financial Supervisory Service’s Special Judicial Police is investigating allegations of fraudulent and illegal trading activities related to HYBE's IPO.
It is suspected that before HYBE's listing in 2020, the company misled investors into believing there were no plans for an IPO. Investors who trusted that HYBE would not go public subsequently transferred their shares to a special purpose company (SPC), owned by HYBE executives and established through a private fund. After HYBE’s IPO, this SPC sold the shares it held and then closed down.
Chairman Bang is allegedly entitled to receive 200 billion KRW, equivalent to 30% of the capital gains from the sale of shares, based on a shareholder agreement made prior to the IPO. This shareholder agreement was not disclosed in HYBE’s securities registration statement, meaning the investors who participated in the IPO were unaware of this arrangement.
Furthermore, the large-scale sale of shares by this SPC is estimated to have contributed to a decline in HYBE’s stock price, causing potential harm to ordinary shareholders. On July 24, the police raided HYBE's headquarters as part of the investigation into these suspicions.
