Police Conduct Search And Seizure At HYBE Following Allegations Of Chairman Bang Si Hyuk's Fraudulent Trading
Police are currently conducting a search and seizure on HYBE following allegations of fraudulent trading.
On July 24, the Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency announced that it began a search and seizure operation around 9 a.m. at HYBE’s headquarters in Yongsan district of Seoul.
HYBE’s chairman Bang Si Hyuk is currently under suspicion of violating the Capital Markets Act by misleading existing investors such as venture capital (VC) firms during HYBE’s 2019 IPO (initial public offering) process. He allegedly falsely claimed there were no plans to go public, leading the investors to sell their shares to a special purpose company (SPC) established by a private equity fund, then proceeded with the IPO.
It was previously reported that the Capital Market Investigation Deliberation Committee (CMIDC) suspects that Bang Si Hyuk and three senior executives, along with one aide, set up the private equity fund, with Bang Si Hyuk reportedly profiting approximately 200 billion won (approximately $146 million).
Police applied for a search and seizure warrant for HYBE’s headquarters on July 17. However, a dispute over investigative jurisdiction arose on July 21 when the Seoul Southern District Prosecutors’ Office, having received the case from financial authorities, assigned it to the Financial Supervisory Service’s (FSS) special judicial police. With the police initiating the search and seizure, it is speculated that they may now be taking the lead in the investigation.
