Source: Chosun Ilbo
Financial regulators have decided to file a criminal complaint against HYBE Chairman Bang Si-hyuk.
According to financial authorities on July 8, the Capital Market Investigation Deliberation Committee (CMIDC), which operates under the Financial Services Commission’s Securities and Futures Commission, held a meeting on the 7th and made this decision, forwarding their opinion to the Securities and Futures Commission. If the Commission confirms this decision at its regular meeting on the 16th, it will mark the first instance of strong disciplinary action against a high-profile individual since President Lee Jae-myung’s administration began, following his pledge to crack down hard on stock market manipulation.
Bang Si-hyuk is accused of misleading existing investors into believing that there were no plans for HYBE to go public, thereby convincing them to sell their shares, and then pocketing approximately 200 billion KRW (~$145 million) in profit from the IPO. The same measure will also be taken against 3 former HYBE executives suspected of being involved. A criminal complaint is the highest level of disciplinary action the financial authorities can impose on individuals violating the Capital Markets Act.
Financial authorities: "Bang defrauded investors and pocketed 200 billion KRW," - View the charges as serious
A source from the financial authorities stated, "Chairman Bang’s actions misled general investors and caused significant losses, so we determined that this is a serious offense that warrants heavy punishment.” Under the current Capital Markets Act, any unlawful gains exceeding 5 billion KRW (~$3.6 million) can lead to life imprisonment or a minimum of 5 years in prison.
The reason financial regulators are pursuing the highest level of sanctions against Bang is that they view the charges as particularly severe. According to authorities, around 2020, before HYBE went public, Bang entered a private agreement with a fund established by close HYBE executives, granting him 30% of the capital gains made through IPO-related share sales.
However, he allegedly told existing shareholders that there were no plans for an IPO while persuading them to sell their HYBE shares to this private fund, even offering to buy at a relatively high price. Believing him, the shareholders sold their shares. After HYBE’s IPO, Bang reportedly received about 200 billion KRW from the profits the fund made selling the shares.
A financial authority official stated, "Large shareholders like Chairman Bang are subject to a lock-up (restrictions on selling shares for a certain period after listing) to protect retail investors. He appears to have tried to circumvent this by using the private fund."
Bang is said to have argued during the Financial Supervisory Service (FSS) investigation that there was no legal issue with this type of transaction. However, the FSS concluded that his actions violated Article 178 of the Capital Markets Act, which regulates unforeseen types of unfair trading practices. The FSS recommended a criminal complaint to the Financial Services Commission, and the CMIDC has reportedly accepted that recommendation.
A source stated, "When the fund linked to Bang dumped shares onto the market, it caused the stock price to drop, and ordinary investors suffered losses. Since HYBE executives were mobilized and the act was systematic, there’s a strong possibility of a guilty verdict.”
Bang’s case tied to Lee Jae-myung administration’s market cleanup pledge
This heavy disciplinary move also aligns with the policy direction of the new Lee Jae-myung administration. As a presidential candidate, Lee pledged a "one-strike-out" rule, that any party caught manipulating stock prices would be permanently banned from the market. After taking office last month, his first official external visit was to the Korea Exchange, where he reaffirmed that stance.
- [+692, -23] This is the biggest scam since the founding of Korea. I hope measures are taken so that Korea’s stock market can regain the trust of individual investors. Also, this company has always used its artists to shield the executives' corruption, take responsibility for your own damn crimes. What did the artists under this company, especially BTS, ever do wrong? Every time, it’s the same…
- [+472, -5] This broke out ages ago, why are they only moving now? While they’re at it, investigate the former FSS chief and former Southern District Prosecutor too. I’m 100% sure they sat on it because of HYBE lobbying함
- [+333, -15] Where the hell did all the people who were foaming at the mouth over New Jeans' supposed 600 billion won scam go? ㅋㅋㅋㅋㅋㅋㅋㅋㅋㅋ So quiet now? ㅋㅋㅋㅋㅋㅋㅋㅋㅋㅋ Does this bastard think he’s above the law? ㅋㅋㅋ Probably sitting cozy overseas melting away that 400 billion
- [+269, -8] Hmph… Just pay for your crimes. If he gets life in prison, maybe the blood, sweat, and tears of small investors will be compensated a little.
- [+246, -17] Finally, K-pop is taking one step closer toward normalcy. Thank god.
- [+197, -5] Last year he wrote a petition about how Min Hee-jin’s actions were "driven by malice and damaged the system"... Wasn’t that just a self-introduction?? Please, stop sabotaging the growth of K-pop. Admit your wrongdoing and disappear. So many people are suffering because of you.
- [+99, -1] Mr. Bang is trying to use BTS’s comeback as an excuse to flee to the U.S. Catch and lock him up ASAP. He’s K-pop’s best (worst) parasite. He's been scooping up every cent of fans’ pocket money and throwing it around like it's his own cash all over the U.S. HYBE’s barely surviving through tentacle-style expansion. Uncover the nasty truth behind HYBE and Bang. Don’t use innocent BTS as a human shield to create your own twisted “real BTS!”
- [+98, -1] I heard he swindled 400 billion won, but now it’s down to 200 billion?? They went rabid in the press over Min Hee-jin for breach of duty, but now he’s the one being charged with fraud and breach of trust. He dragged in every HYBE-related org to dogpile New Jeans members over “tampering” or whatever, but turns out he was the mastermind. This guy’s talent is blaming everyone else for his own mess. Just because it’s Bang, don’t go hating on HYBE’s idol groups. But if he’s convicted, Bang and his cronies need to completely step down from their chairman and exec roles. That’s the bare minimum they owe to the idol groups who’ve poured their blood, sweat, and tears into this, and to the shareholders.
- [+96, -1] Arrest him immediately. Don’t give us some weird excuse while this scammer keeps shaking up the economy and undermining the foundation of K-pop!!
- [+83, -1] Why did 400 billion suddenly turn into 200 billion? The truth is: the IPO was worth 1.2 trillion, Bang took 400 billion, his cronies took 800 billion, that’s the real story.
- [+76, -0] Isolate him from society forever.
- [+46, -1] A stock fraud who used K-pop to pad his personal wealth? Straight to jail!!
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