Bang Si-hyuk, chairman of HYBE, has been accused of fraudulent trading activities and reported to the prosecution.
The Securities and Futures Commission, under the Financial Services Commission, held its 14th regular meeting on the 16th and announced that it had reported Bang and other former executives of HYBE to the prosecution.
Chairman Bang is suspected of misleading existing shareholders into believing that the listing would be delayed for the purpose of profiting from the sale of stocks during HYBE's IPO process. While preparing for HYBE's listing, he allegedly deceived shareholders into selling their holdings to a special purpose company (SPC) established by private equity fund executives involved.
Chairman Bang also concealed a contract among shareholders that included a provision stating that he would receive 30% of the profits from the sale. It is reported that he earned about 400 billion won from the private equity fund. According to the Capital Markets Act, if the benefit or avoidance amount related to violations exceeds 5 billion won, it can result in life imprisonment or imprisonment for more than five years.
Additionally, former executives of HYBE are known to have taken unfair profits as performance compensation by utilizing their status as investors in the private equity fund's management company (GP).
The Securities and Futures Commission stated, "The financial authorities will actively cooperate with the prosecution's investigation to thoroughly clarify the allegations regarding this case of high social interest," adding, "We will continue to monitor the potential for unfair profit-taking by the largest shareholders to secure the fairness of the capital market and protect investor trust."