HYBE has pledged to cooperate fully with authorities as South Korea’s financial regulator reportedly prepares to refer the K-pop giant\u2019s founder and Chairman, Bang Si-hyuk, to prosecutors over allegations related to the company\u2019s 2020 IPO.<\/p>\n
That’s according to The Korea Herald,<\/em><\/a> Korea Times <\/em>and other local news outlets, <\/em>which report that The Securities and Futures Commission<\/b>\u2019s capital market investigation team voted on Monday (July 7) to refer Chairman Bang to prosecutors, with the commission set to formally consider the recommendation at its July 16 meeting.<\/p>\n The Korea Times <\/i>said<\/a> referral to the prosecution is the most severe administrative action that financial regulators in Korea can take against an individual suspected of violating the Capital Markets Act<\/b>.<\/p>\n HYBE<\/b> said in a statement issued to MBW: <\/i>“We regret any concern caused by the recent reports related to our IPO process. HYBE is fully cooperating with the local authorities, including the financial regulators and the police, by submitting relevant materials and providing detailed explanations as part of the fact-finding efforts.<\/p>\n \u201cWe will take the necessary time to thoroughly demonstrate that the IPO was carried out in full compliance with laws and regulations.”<\/p>\n On June 30, South Korean police raided Korea Exchange <\/b>offices in Seoul as part of an expanding investigation into alleged securities violations related to the company\u2019s IPO.<\/p>\n “HYBE is fully cooperating with the local authorities, including the financial regulators and the police, by submitting relevant materials and providing detailed explanations as part of the fact-finding efforts.\u201d<\/p>\n HYBE<\/span><\/p><\/blockquote>\n Citing Korean police,\u00a0Korea JoongAng Daily\u00a0<\/i>reported<\/a>\u00a0at the time that the authorities collected evidence for their probe into potential capital markets law violations by\u00a0Chairman Bang.<\/p>\n In late May, it was reported<\/a>\u00a0that the Financial Supervisory Service<\/b> (FSS) intensified its probe into Chairman Bang regarding alleged arrangements with specific investors and private equity funds prior to the company\u2019s 2020 IPO.<\/p>\n While this story was initially covered at the close of 2024, it gained renewed attention more than a month ago when the\u00a0Korea Economic Daily\u00a0<\/i>published additional details<\/a>.<\/p>\n The publication said the FSS was conducting \u201ca fast-tracked investigation into [Chairman] Bang\u2019s transactions with the PEFs and plans to refer the case to prosecutors for potential criminal prosecution.\u201d<\/p>\n \u201cWe will take the necessary time to thoroughly demonstrate that the IPO was carried out in full compliance with laws and regulations.”<\/p>\n HYBE<\/span><\/p><\/blockquote>\n Chairman Bang is reportedly alleged to have defrauded early investors and pocketed about\u00a0400 billion won<\/strong>\u00a0(approx. $291 million) or\u00a030%<\/strong> of the private equity fund\u2019s investment returns after HYBE completed its listing in October 2020.<\/span><\/p>\n The FSS claims he misled investors in 2019 by saying the company had no plans to go public, prompting them to sell their shares to a private equity fund connected to him.<\/p>\n In late May, South Korean authorities raided<\/a> HYBE\u2019s headquarters as part of a separate investigation into alleged insider trading by a former executive.<\/p>\n\n
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