Financial watchdog will ask government to prosecute HYBE chairman

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Financial watchdog will ask government to prosecute HYBE chairman

Published: 09 Jul. 2025, 13:40 Updated: 09 Jul. 2025, 14:50

SHIN MIN-HEE
[email protected]

Audio report: written by reporters, read by AI

HYBE Chairman Bang Si-hyuk [YONHAP]

Financial authorities will refer Bang Si-hyuk to prosecution on suspicion that the HYBE chairman deceived investors regarding the K-pop agency's public listing.

The decision to refer Bang, as well as three other former and current HYBE executives, to prosecutors was made during a meeting of the capital market investigation committee under the Financial Services Commission’s (FSC) Securities and Futures Commission on Tuesday, the Chosun Ilbo reported Wednesday.

The recommendation was passed on to the FSC's securities commission and is set to be confirmed during its next meeting on July 16, according to the Chosun Ilbo report.

A criminal complaint is the most severe sanction financial authorities can impose on an individual suspected of violating the Capital Markets Act.

Bang has been accused of misleading HYBE shareholders during the firm’s listing process in 2019, falsely claiming that there would be no public offering and persuading investors at the time to sell their shares to a private equity fund owned by his associate. HYBE was, in fact, preparing to go public at the time.

Bang allegedly pocketed around 400 billion won ($291 million) after HYBE went public. Bang had been promised 30 percent of the firm’s sales.

The suspected transaction between Bang and the fund was not disclosed in the company’s securities filings. Financial authorities suspect Bang used the firm to dodge lock-up restrictions, which prevent major shareholders and company insiders from selling their shares for a set period after an initial public offering (IPO).

“Bang’s actions deceived investors and caused them significant harm, which we consider a serious offense that warrants a strong penalty,” an official at the FSC was quoted as saying in the Chosun Ilbo report.

Current laws mandate that any gains or evasion of loss through illegal activity that surpass five billion won can result in a life sentence or a minimum five-year prison sentence.

Bang has argued in recent investigations that his transaction did not violate the law.

HYBE said in a statement that it would fully cooperate with authorities.

“We sincerely apologize for causing concern over news related to our IPO,” HYBE said in the statement. “We are actively complying with the fact-finding efforts of financial authorities and the police by providing detailed explanations and relevant evidence. Although it may take time, we will fully demonstrate that the company’s listing was carried out in accordance with the law and regulations.”

BY SHIN MIN-HEE [[email protected]]