Asian Junkie Asian pop. Without discretion.
After being investigated for what seemed like forever over allegations of fraudulent and unfair trading, it’s been reported that police are now seeking an arrest warrant for HYBE chairman Bang Si Hyuk.
Chairman Bang Si Hyuk is suspected of deceiving investors by claiming that there were no plans for an IPO before HYBE went public in 2019, thereby inducing a specific private equity fund (PEF) to sell its stake in HYBE, only to proceed with the listing shortly thereafter.
Police believe that, under a private agreement made in advance with the private equity fund, Bang Si Hyuk received 30 percent of the profits from the sale of shares after the IPO, resulting in nearly 200 billion won (approximately $13,585,000) in illicit gains.
Bang Si Hyuk maintains that he did not deceive the initial investors, asserting that the sale was carried out at the request of the investors themselves and that the profit-sharing terms were conditions first proposed by the investors.
There’s nothing we didn’t already know in this, but obviously it’s a significant turn of events given how long the investigation had been going on.
As mentioned before, the potential consequences of a conviction are serious.
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.
He could also be fined anywhere from 800 billion won to 1.2 trillion won — four to six times the amount it’s now alleged he pocketed (~200 million won) — and investors who suffered losses could then pursue legal action.
While most cynical people (including me) were skeptical it would even get to this point given how conglomerates usually get away with everything, one reason this might be going different is that the Lee Jae Myung has made it a point that they were going to crack down on these types of financial crimes, and those efforts appear to be ongoing.
The office is simultaneously pursuing multiple financial crime cases, ranging from market manipulation involving a former securities firm executive to suspected insider trading by employees of KOSDAQ-listed Rainbow Robotics, whose stock surged dozens of times following news of Samsung Electronics’ acquisition. With President Lee Jae-myung declaring that stock manipulators will face “complete ruin,” investigations are expected to expand further in scope.
We shall see.
