Financial Supervisory Service is investigating allegations of fraudulent trading involving Bang Si-hyuk, the founder of HYBE.

According to the financial investment industry on the 28th, the FSS has secured evidence that Bang misled shareholders about the lack of an initial public offering (IPO) plan during HYBE's listing process and is under investigation for fraudulent trading in violation of the Capital Markets Act.

Bang Si-hyuk, the chairman of the HYBE board, attends the 64th regular general meeting and new CI unveiling event of FKI held at the FKI Tower in Yeouido, Seoul, on Feb. 20. He listens to Chairman Ryu Jin's speech. /Courtesy of News1

Prior to listing HYBE in 2020, Bang entered into a contract to share 30% of the profits from the sale of equity with a private equity fund established by a friend, and received around 400 billion won after the listing. This contract was not mentioned in the securities registration statement. The private equity fund acquired HYBE shares from existing investors, including institutional investors and venture capitalists.

The FSS has reportedly secured evidence that Bang's side communicated to existing investors at the end of 2019 that an IPO was currently impossible while also applying for a designated audit, indicating an ongoing push for the IPO.

The FSS noted that it cannot confirm individual matters.