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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] South Korean police have launched a compulsory investigation into HYBE Corporation as part of an ongoing probe into alleged fraudulent trading involving Chairman Bang Si-hyuk.
On July 24, the Financial Crime Investigation Division of the Seoul Metropolitan Police Agency began executing a search and seizure operation at HYBE’s headquarters in Yongsan, Seoul, starting around 9 a.m.
Chairman Bang is suspected of violating the Capital Markets Act by engaging in fraudulent transactions. Specifically, in 2019—prior to HYBE’s public listing—he allegedly misled existing investors, including venture capital firms, by claiming there were no plans for an initial public offering (IPO). As a result, investors sold their shares to a special purpose company (SPC) established by a private equity fund affiliated with Bang.
However, financial authorities have found that HYBE was, in fact, proceeding with preliminary IPO procedures at the time, such as applying for a designated auditor.
Bang later pushed ahead with the IPO and reportedly received approximately KRW 190 billion (USD 140 million) in illicit gains, including a 30% share of profits from the stake sales through the private equity fund.
The investigation is being conducted jointly by the police and special judicial officers from the Financial Supervisory Service (FSS), under the oversight of the prosecution.
Authorities have been accelerating their investigation, previously seizing documents related to HYBE’s IPO review during a June 30 raid on the Korea Exchange in Yeongdeungpo. On July 17, the police also secured court warrants for the latest search and seizure of HYBE’s premises.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
