HYBE’s chairman Bang Si Hyuk is now caught in a major controversy that could lead to life in prison if he’s found guilty.
On May 28, Korea Economic Daily reported that the Financial Supervisory Service (FSS) is getting ready to ask prosecutors to officially investigate Bang Si Hyuk for serious fraud and illegal deals.
The issue goes back to 2019. At the time, Bang reportedly told some of HYBE’s investors that the company had no plans to go public.
But according to FSS findings, HYBE was already in the middle of preparing for an IPO (Initial Public Offering). Based on what Bang said, the investors sold their shares to a private equity fund (PEF) set up by someone close to him.
Behind the scenes, Bang is said to have made a deal to receive 30% of the profits from this fund. In total, that deal reportedly brought in about 400 billion won. However, this agreement was not included in HYBE’s official IPO documents — a possible violation of financial law.
The FSS believes this is a clear case of a “fraudulent unfair transaction” under the Capital Markets Act and plans to quickly send the case to prosecutors through a fast-track process. The Seoul Metropolitan Police Agency’s Financial Crime Investigation Unit is also digging into the same case.
HYBE, however, says everything was done by the book. A company representative stated, “All transactions were done legally and were reviewed by legal experts.”
Even so, the FSS reportedly has strong proof that HYBE was already preparing for an IPO in 2019. In November of that year, HYBE signed a contract with Hanyoung Accounting Corporation — something that’s required when a company wants to go public. To do that, HYBE had to submit key paperwork like board meeting records and lead manager contracts.
But while that was happening, Bang Si Hyuk allegedly told older investors that HYBE wasn’t planning to go public — creating a big contradiction.
If the accusations are proven true, the punishment could be extremely serious. According to Article 443 of the Capital Markets Act, someone who gains or avoids losing more than 5 billion won through illegal actions can face life in prison or at least five years behind bars.
Authorities also warned that they will respond strongly, since this case could shake trust in the financial market and involves a well-known figure with major influence.
Source: [1]
