Again in December, a story broke in South Korea that HYBE’s founder and Chairman, Bang Si-hyuk, was going through an investigation by the nation’s Monetary Supervisory Service (FSS).
The reported investigation by South Korea’s monetary regulator concerned what the media referred to as “secret” contracts with sure shareholders earlier than and through the firm’s IPO in 2020.
The story has resurfaced this week, through a brand new article from the Korea Financial Day by day, aka Hankyung, claiming that the FSS is now planning to refer the case to South Korean prosecutors.
Citing sources, the Korea Financial Day by day stories that South Korea’s monetary regulator has secured proof that Bang Si-hyuk misled HYBE buyers in 2019 by telling them there have been no plans for an IPO.
These alleged claims reportedly prompted buyers to promote their shares to non-public fairness funds [PEFs] related to Bang Si-hyuk, with whom he had supposedly struck profit-sharing offers, whereas the corporate was getting ready to go public.
The Korea Financial Day by day’s report claims that “whereas buyers suffered heavy losses from the post-IPO sell-off, Bang reportedly obtained 400 billion gained ($289.3 million) from the PEFs based mostly on the confidential association”.
HYBE started buying and selling on the Korea Alternate on October 15, 2020.
The worldwide version of the Korea Financial Day by day stories that the FSS is conducting “a fast-tracked investigation into Bang’s transactions with the PEFs and plans to refer the case to prosecutors for potential felony prosecution”.
The Korea Financial Day by day stories that the FSS is now investigating the case over “unfair commerce practices,” having supposedly initially investigated it for “violations of securities report descriptions”.
The information outlet additionally stories that the Monetary Crime Investigation Unit of the Seoul Metropolitan Police Company is conducting a separate investigation into the case.
A key challenge within the case is that these alleged shareholder agreements have been reportedly not disclosed in HYBE’s IPO filings, which, if true, could possibly be a violation of the Capital Markets Act in South Korea.
The Korea Occasions notes that “offenses involving unlawful earnings or avoiding losses of over 5 billion gained are punishable below the Capital Markets Act by a minimal of 5 years in jail and as much as life imprisonment”.
The Korea Financial Day by day cites a HYBE spokesperson as saying: “All transactions have been carried out inside authorized boundaries after going via a authorized overview.”
HYBE denied allegations of any wrongdoing when the preliminary story broke on the finish of 2024.
“Our firm offered the shareholder settlement in query to the IPO underwriters through the itemizing preparation course of,” HYBE mentioned on the time.
MBW has reached out to HYBE for touch upon the most recent stories.Music Enterprise Worldwide
