Bang Si-hyuk, chair of HYBE, who is accused of pocketing 190 billion won in illicit gains during the initial public offering (IPO) process, returned home after about 13 hours of police questioning.
At about 11:48 p.m. on the 15th, Chair Bang left the Seoul Metropolitan Police Agency's Metropolitan Investigation Unit building in Mapo District, Seoul, and, without answering questions such as "What did you clarify?" and "Is it true you delivered false information?", got into a waiting car surrounded by bodyguards and headed home.
The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency summoned Chair Bang as a suspect at 10 a.m. that day to question allegations that, ahead of HYBE's IPO, existing investors were deceived into selling their equity. Appearing before police, Bang told reporters, "I am sorry for causing concern with my matter," and "I will faithfully cooperate with the investigation."
Chair Bang is suspected (violation of the Capital Markets Act) of telling venture capital and other existing HYBE investors in 2019 that there were no plans to list, then having them sell their equity to a special purpose company (SPC) created by a private equity fund set up and funded by HYBE executives. Investors, trusting Bang's words, sold their holdings, but financial authorities found that HYBE was in fact proceeding with preliminary IPO steps during this period.
After the IPO process moved forward, police believe Bang reaped illicit gains of 190 billion won, including receiving 30% of the stock sale profits from the private equity fund. Police obtained related intelligence late last year and launched an investigation, and special judicial police officers of the Financial Supervisory Service, who operate under prosecutorial guidance, are separately looking into the allegations.
The Capital Markets Act prohibits acts such as seeking pecuniary gain through lies or using fraudulent schemes in connection with financial investment products, including unlisted shares. Violations that yield 5 billion won or more in profit are punishable by life imprisonment or at least five years in prison.
Bang's side denies the allegations, saying, "We proceeded in compliance with laws and regulations at the time of listing."