HYBE’s founder and chairman, Bang Si Hyuk, has spoken publicly for the first time since reports surfaced accusing him of stock market fraud worth 200 billion won.
On July 9, HYBE issued an official statement addressing the swirling allegations linked to its initial public offering (IPO) process.
The company apologized for causing concern, saying, “We sincerely apologize for causing concern due to the recent news related to our company’s listing process. Regarding the issues currently being raised, our company is actively cooperating with the financial authorities and the police by submitting relevant materials along with detailed explanations.”
HYBE stressed that they plan to clarify the facts thoroughly, promising, “Even if it takes some time, we will faithfully clarify that the listing at that time was carried out in compliance with all applicable laws and regulations.”
The controversy centers around claims that Bang Si Hyuk misled early investors before HYBE’s stock market debut. Authorities allege that Bang privately told investors there were no IPO plans, while secretly selling shares to a private equity fund (PEF) set up by an associate.
Reportedly, before HYBE’s listing, Bang signed a deal with the PEF to receive 30% of the profits from the share sale. This agreement was not disclosed during the Korea Exchange’s review or in official filings with the Financial Supervisory Service. It is said that Bang Si Hyuk pocketed around 200 billion won in profits through this arrangement once HYBE went public.
As a result, financial authorities believe Chairman Bang used the private equity fund to get around protective custody rules. This usually prevents major shareholders from immediately offloading large blocks of shares for a certain holding period after a company lists.
On July 7, the Capital Market Investigation Review Committee under the Financial Services Commission reached this decision and passed its opinion to the Securities and Futures Commission.
If the SFC gives its final approval, Bang Si Hyuk and three current and former HYBE executives could also face indictment. The SFC is expected to hold further deliberations on the case next week.
HYBE has pledged to share more information as they cooperate fully with authorities to clear up the allegations and rebuild trust with shareholders and the public.
Meanwhile, this could become the first indictment under new President Lee Jae Myung’s “one strike” policy. The new system focuses on strict punishment for stock manipulation and unfair trading practices. Under the new rule, even one instance of price manipulation or unfair trading will result in a lifetime ban from the market.
