HYBE Chairman Bang Si-hyuk Summoned Twice for 'Fraudulent Trading' Allegations Related to IPO

Bang Si-hyuk, Chairman of HYBE, has recently confirmed to have undergone two additional summons related to the allegations of 'fraudulent trading' raised during the IPO process. The police suspect that Chairman Bang provided false information to induce a specific private equity fund to sell its shares, thereby acquiring substantial undue profits.

According to related reports on the 18th, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency conducted two additional summons of Chairman Bang over the past weekend (15-16) for intensive questioning. This is said to be a supplementary investigation as the first investigation conducted on the 5th was not completed.

Allegations of Providing False Information During the IPO Process

Chairman Bang is accused of providing false information to investors in HYBE in 2019, stating that "there are no plans for stock listing," which led a specific private equity fund (PEF) to sell its shares.

The police suspect that Chairman Bang received 30% of the profits from the sale of shares after HYBE was listed, according to a non-disclosure agreement signed in advance with the private equity fund, acquiring approximately 190 billion won in undue profits. This is considered a violation of the regulations prohibiting the provision of false information and the use of improper methods related to financial investment products, including unlisted stocks, under the Capital Markets Act.

After obtaining information about Chairman Bang's allegations at the end of last year, the police launched a full-scale investigation by raiding the Korea Exchange and HYBE headquarters in June and July of this year. Subsequently, they imposed a travel ban on Chairman Bang and have conducted a total of five summons including this weekend's investigation.

At a press conference on the 17th, a police official stated regarding Chairman Bang's case that "the investigation is considerably advanced," suggesting that the investigation results may be released soon.

Chairman Bang's Side Maintains Position of 'Compliance with Regulations, No Issues'

Meanwhile, Chairman Bang's side maintains its existing position that "we thoroughly complied with relevant laws and regulations at the time of the company's listing, and there are no legal issues."

This incident has raised transparency concerns regarding the IPO process of HYBE, which leads the domestic entertainment industry, and the industry is focusing on the potential impact of the police investigation results on the domestic capital market and the entertainment sector as a whole.