Bang Si-hyuk, Chairman of HYBE. /Courtesy of News1

Financial authorities decided to file criminal charges against Bang Si-hyuk, chair of HYBE, under the Capital Markets Act for fraudulent trading.

According to financial authorities on the 9th, the Capital Markets Investigation Committee, an advisory body under the Securities and Futures Commission, recently made this decision. The committee has submitted its opinions to the Securities and Futures Commission, which is scheduled to hold a regular meeting on the 16th to discuss the related agenda. There is a prevailing view that the possibility of the commission overturning the decision is low.

Chair Bang entered into a contract before HYBE's listing in 2020 to receive 30% of the profit from the sale of equity from a private equity fund established by an acquaintance. This private equity fund purchased HYBE shares from existing investors, including institutions and venture capitalists. It is said that the chair's side conveyed to existing investors that listing was impossible at that time.

However, HYBE entered the KOSPI market in October 2020. After the listing, the private equity fund sold its holdings of HYBE shares and made a profit, and it is reported that Chair Bang received about 400 billion won in settlement. The contract details between Chair Bang and the private equity fund were omitted during the listing review process of the Korea Exchange and the submission of the securities report to the Financial Supervisory Service.

Financial authorities suspect that Chair Bang used a private equity fund to circumvent a protective escrow that restricts the sale of equity for a certain period after the listing.