{"id":232567,"date":"2025-05-29T14:23:24","date_gmt":"2025-05-29T13:23:24","guid":{"rendered":"https:\/\/www.musicbusinessworldwide.com\/?p=232567"},"modified":"2025-05-29T15:53:36","modified_gmt":"2025-05-29T14:53:36","slug":"south-korea-financial-watchdog-reportedly-plans-to-refer-hybes-bang-si-hyuk-to-prosecutors-over-alleged-ipo-fraud","status":"publish","type":"post","link":"https:\/\/www.musicbusinessworldwide.com\/south-korea-financial-watchdog-reportedly-plans-to-refer-hybes-bang-si-hyuk-to-prosecutors-over-alleged-ipo-fraud\/","title":{"rendered":"South Korea financial watchdog reportedly plans to refer HYBE’s Bang Si-hyuk to prosecutors over alleged IPO fraud"},"content":{"rendered":"

Back in December, a story broke<\/a> in South Korea that HYBE\u2019s founder and Chairman, Bang Si-hyuk, was facing an investigation by the country’s Financial Supervisory Service (FSS).<\/p>\n

The reported investigation by South Korea\u2019s financial regulator involved what the media called \u201csecret\u201d contracts with certain shareholders before and during the company\u2019s IPO in 2020.<\/p>\n

The story has resurfaced this week, via a new article f<\/a>rom the Korea Economic Daily<\/em>, aka Hankyung,\u00a0<\/em>claiming that the FSS is now planning to refer the case to South Korean prosecutors.<\/p>\n

<\/div>
<\/div>
<\/div> <\/div> <\/p>\n

Citing sources, the Korea Economic Daily<\/em> reports<\/a> that South Korea\u2019s financial regulator has secured evidence that Bang Si-hyuk misled HYBE investors in 2019 by telling them there were no plans for an IPO.<\/p>\n

Those alleged claims reportedly prompted investors to sell their shares to private equity funds [PEFs] connected to Bang Si-hyuk, with whom he had supposedly struck profit-sharing deals, while the company was preparing to go public.<\/p>\n

The Korea Economic Daily’s<\/em> report claims that “while investors suffered heavy losses from the post-IPO sell-off, Bang reportedly received 400 billion won ($289.3 million) from the PEFs based on the confidential arrangement”.<\/p>\n

HYBE began trading<\/a> on the Korea Exchange on October 15, 2020.<\/p>\n

<\/div> <\/div> <\/p>\n

The global edition of the Korea Economic Daily<\/i> reports<\/span><\/a> that the FSS is conducting “a fast-tracked investigation into Bang\u2019s transactions with the PEFs and plans to refer the case to prosecutors for potential criminal prosecution”.<\/p>\n

The Korea Economic Daily<\/em> reports that the FSS is now investigating the case over “unfair trade practices,” having supposedly originally investigated it for “violations of securities report descriptions”.<\/p>\n

The news outlet also\u00a0reports<\/span><\/a> that the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency is conducting a separate investigation into the case.<\/p>\n

<\/div> <\/div> <\/p>\n

A key issue in the case is that those alleged shareholder agreements were reportedly not disclosed in HYBE’s IPO filings, which, if true, could be a violation of the Capital Markets Act in South Korea.<\/p>\n

The Korea Times<\/i>\u00a0notes<\/span><\/a> that “offenses involving illegal profits or avoiding losses of over 5 billion won are punishable under the Capital Markets Act by a minimum of five years in prison and up to life imprisonment”.<\/p>\n

The Korea Economic Daily cites a HYBE spokesperson <\/a>as saying: \u201cAll transactions were conducted within legal boundaries after going through a legal review.\u201d<\/p>\n

HYBE denied allegations of any wrongdoing when the initial story broke at the end of 2024.<\/p>\n

\u201cOur company provided the shareholder agreement in question to the IPO underwriters during the listing preparation process,\u201d HYBE said at the time.<\/p>\n

MBW has reached out to HYBE for comment on the latest reports.<\/p>\n","protected":false},"excerpt":{"rendered":"

Bang Si-hyuk alleged to have misled HYBE investors in 2019 <\/p>\n","protected":false},"author":15,"featured_media":232339,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[],"class_list":["post-232567","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts\/232567","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/comments?post=232567"}],"version-history":[{"count":0,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts\/232567\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/media\/232339"}],"wp:attachment":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/media?parent=232567"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/categories?post=232567"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/tags?post=232567"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}