BANG SI HYUK
Police referred HYBE Chairman BANG SI HYUK to prosecution without detention under the charge of fraudulent and unfair transactions.
The Financial Crime Investigation Team of the Seoul Metropolitan Police Agency declared on September 3 that it had referred HYBE Chairman BANG SI HYUK, HYBE executives, and private equity fund officials, totaling 5 people, without detention to the Seoul Southern District Prosecutors’ Office under suspicions of fraudulent and unfair transactions under the Capital Markets Act.
This comes about 21 months after police became aware of the case and started their preliminary investigation.
According to police, Chairman BANG SI HYUK and other individuals are suspected of deceiving existing HYBE (then Big Hit) investors in 2019, such as venture capital firms, by claiming there was no initial public offering (IPO) plan, before recommending the sale of their shares to a specific private equity fund. Police estimate that they deceived existing shareholders regarding the absence of an IPO plan in order to buy back their shares via the private equity fund, then resold them after the IPO, thereby realizing an illicit profit of approximately 263.1 billion won.
Regarding KIM JOUNG DONG, former Chief Investment Officer (CIO) of HYBE who left the country to flee abroad just before the raid, police obtained an arrest warrant and requested his placement on the wanted list as well as an Interpol Red Notice. Regarding the illicit profits acquired by the suspects through this offense, a request for pre-indictment preservation order was filed, and the court ordered the preservation of the entire amount.
According to police investigation results, although they were preparing for the IPO, they recommended existing shareholders sell their shares to the private equity fund by asserting there was no IPO plan, and the private equity fund recruited investors by guaranteeing a confirmed IPO and profits to purchase the existing shareholders’ shares.
A police official explained: “Under the shared goal of obtaining capital gains during the IPO, the executives concealed from existing shareholders the IPO information they monopolized in order to derive personal profit from it”, adding: “We judged that it was an act disrupting the capital market order and undermining fairness and trust in this market”.
Police had previously requested an arrest warrant twice last April and May, but prosecution rejected both on the grounds that supplementary investigation had not been conducted.
Regarding this matter, HYBE entirely denies the content of the charges brought against Chairman BANG SI HYUK and other officials.
Journalist: Shawn
Translator: Shawn
Source: Korean Media
