SEOUL, July 17 — South Korean financial regulators have referred Hybe chairman and founder Bang Si-hyuk to prosecutors over allegations of fraudulent trading during the K-pop agency’s initial public offering (IPO).
The Financial Services Commission’s Securities and Futures Commission said it filed a criminal complaint against the mogul known as “Hitman” Bang who also produced popular boy group BTS, and several former Hybe executives for allegedly violating the Capital Markets Act, The Korea Herald reported today.
“The suspects circumvented the lock-up period meant to prevent major shareholders from offloading shares immediately after listing, and dumped their shares on the market for profit.
“The nature of this violation is particularly serious,” an unnamed financial authority official was quoted as saying.
The Korean newspaper described the move as the strongest disciplinary action taken by regulators under the administration of new president Lee Jae-myung against a major conglomerate head.
A referral to the prosecution is the harshest penalty South Korean regulators can issue, alongside administrative fines.
Under South Korean law, anyone who gains or avoids losses exceeding five billion won through unfair trading could face up to life imprisonment.
According to the news report, Bang allegedly misled early investors in 2019 by claiming the company had no plans to go public, prompting them to sell their shares.
He is also accused of signing a private agreement with a private equity fund to share 30 per cent of any future profits, later earning nearly 400 billion won (RM1.47 billion).
Authorities said the stock price plunged following the share sale, causing “significant harm” to retail investors.
Bang reportedly declined an opportunity to explain himself in person during the probe.
Hybe said it would fully cooperate with investigators and work to restore market trust.
“It is unfortunate that the financial regulators did not accept the major shareholder’s explanation during the Financial Supervisory Service’s investigation, in which he made clear he did not pursue personal gains based on the company’s IPO,” the company said in a statement to The Korea Herald.
“Nevertheless, we respect the decision and will do our utmost in the upcoming investigation to actively address the allegations and recover the trust of the market and our stakeholders,” it added.
In a separate message posted online, Hybe apologised for the controversy.
“Hello, this is Hybe. We sincerely apologize for causing concern with the recent news related to our company’s listing process.
“Regarding the current issues being raised, we are actively cooperating with the financial authorities and the police by submitting detailed explanations and relevant materials to verify the facts.
“Even if the process takes time, we will thoroughly clarify that our IPO at the time was conducted in full compliance with laws and regulations,” it said.
