HYBE Chairman Bang Si Hyuk has been referred to prosecutors over allegations of unfair trading.
The Seoul Metropolitan Police Agency’s Financial Crime Investigation Unit announced on September 3rd that they had referred Bang to the Seoul Southern District Prosecutors’ Office without detention. He is suspected of violating the Capital Markets Act through unfair trading.
Several other executives were also referred to prosecutors on similar allegations, including HYBE CEO Lee, former Chief Financial Officer Kwon, Estone Equity Partners CEO Yang, and Newmain Equity CEO Kim.
The investigation began about one year and nine months ago after reports alleged that Bang profited unfairly during HYBE’s IPO process.
Bang is accused of telling existing investors in 2019 that HYBE had no plans to go public while the company was preparing for an IPO. He allegedly then sold shares to a private equity fund.
According to police, investors were told there were “no plans for an IPO,” while a private equity fund was set up for certain investors with the promise that HYBE would eventually go public.
The investors eventually sold all of their HYBE shares. HYBE went public about a year later. Police believe Bang and the others made improper profits from the sale based on a contract they had signed with the private equity fund before the IPO.
Police estimate that Bang and the other suspects made a combined 263.1 billion won ($192 million) in improper profits.
Police also asked the court to preserve assets believed to be connected to the alleged profits. The court approved the request for the full amount.
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