Asian Junkie Asian pop. Without discretion.
Alright, before I try to catch up on the other ongoing legal messes, here’s a new one (I think, for here at least) that involves HYBE being investigated for alleged financial crimes. The Financial Supervisory Service (FSS) is reportedly preparing formal criminal charges against CEO Bang Si Hyuk over suspicions of fraudulent transactions related to HYBE’s IPO back in 2019 and 2020.
Bang Si-hyuk, founder and chairman of HYBE, the K-pop powerhouse behind BTS, is under investigation by the Financial Supervisory Service (FSS) for allegedly defrauding investors and pocketing some 400 billion won ($289 million) during the company’s initial public offering (IPO) process, according to sources in the financial industry Thursday.
According to industry sources, the FSS has gathered evidence suggesting that in 2019, Bang misled early investors by claiming HYBE had no plans to go public. This allegedly caused them to sell their shares to a private equity fund (PEF) founded by one of Bang’s close associates. Despite these claims, HYBE had already started IPO procedures, including applying for a designated auditor, a necessary step to take before listing.
What’s particularly concerning is that Bang had a profit-sharing agreement with the PEF. Under this deal, he was entitled to receive about 30% of the investment profits, which reportedly netted him around ₩400 billion KRW (about $291 million USD). However, this contract was not disclosed in the IPO filings, raising red flags about transparency and fairness.
So basically they’re being accused of something more akin to securities fraud than insider trading.
The financial watchdog reportedly suspects that the case may constitute fraudulent and unfair trading practices that undermine capital market order, and is preparing to refer the case to the prosecution through a fast-track process for an expedited investigation.
HYBE responded to the controversy at the time by stating that all transactions were conducted legally after thorough legal reviews.
While some outlets are using the bombastic maximum sentence of life in prison, he does face potential jail time if convicted.
If the allegations are confirmed, Bang could face severe legal consequences, as offenses involving illegal profits or avoiding losses of over 5 billion won are punishable under the Capital Markets Act by a minimum of five years in prison and up to life imprisonment.
Following this news, it was reported that a couple days ago that the Korean police applied for a search and seizure warrant. HYBE has yet to respond to the warrant against Bang Si Hyuk himself. Please don’t tell me this is why he’s doing all the seemingly weekly cringe “he lost weight” mediaplay shit.
All of this initially emerged back in December of last year, though I was probably busy covering other messes. As usual, legal stuff tends to take a lot of time.
