 |
| ▲ Bang Si-hyuk, founder and chairman of Hybe, is seen in this file photo provided by MBC. (PHOTO NOT FOR SALE) (Yonhap) |
SEOUL, July 9 (Yonhap) -- South Korea's financial authorities plan to refer Bang Si-hyuk, chairman of entertainment giant HYBE, to prosecutors next week on suspicion of engaging in fraudulent transactions in violation of the Capital Markets Act, officials said Wednesday.
According to financial authorities and the investment industry, the Capital Market Investigation Deliberation Committee — a sub-body of the Securities and Futures Commission (SFC) under the Financial Services Commission (FSC) — recently held a session and decided to pass its opinion to the SFC recommending Bang’s prosecution.
The SFC is scheduled to hold its regular meeting on July 16 to deliberate on the case. Given the internal structure, it is unlikely the committee's recommendation will be overturned.
A financial authority official said, “Chairman Bang’s actions are seen as a direct violation of the Capital Markets Act and must be viewed with seriousness.”
According to industry sources, prior to HYBE's IPO in 2020, Bang signed a profit-sharing agreement with a private equity fund (PEF) established by an acquaintance, pledging 30% of the proceeds from his stock sales. Following the listing, Bang reportedly received around 400 billion won (US$290 million) under this agreement.
The private equity funds in question also purchased HYBE shares from existing institutional and venture capital investors. Financial authorities have reportedly obtained evidence that while Bang’s side was telling early investors that listing was unlikely, they were simultaneously pushing forward with preparations for an IPO, including applying for a designated audit.
Critics have pointed out that Bang’s contract with the PEF was omitted from both the Korea Exchange’s listing review and the securities registration statement submitted to the Financial Supervisory Service (FSS). This omission allegedly misled early investors who were unaware of the arrangement.
Authorities suspect that Bang may have used the PEF to circumvent a lock-up period that restricts major shareholders and executives from selling shares for a designated period after listing.
Responding to the probe and pending criminal referral, HYBE said in a statement, “We apologize for the concern caused by issues related to the company’s listing process. We are actively cooperating with the financial authorities and police by submitting relevant materials and providing detailed explanations.”
The company added, “Although it may take some time, we intend to fully clarify that the IPO was conducted in compliance with applicable laws and regulations.”
(C) Yonhap News Agency. All Rights Reserved
