On September 15, HYBE President Bang Si Hyuk was summoned and questioned by the Financial Crime Investigation Unit under the Seoul Capital Police Department.
He is currently being investigated for fraudulent transactions under the Capital Market Law, defrauding investors and illegally profiting hundreds of millions of USD.
According to the accusation, in 2019, Bang Si Hyuk declared to shareholders that HYBE (then known as Big Hit Entertainment) had no plans to publicly list public shares (IPO), causing them to sell their shares to a private investment fund established by Bang Si Hyuk's acquaintance. Meanwhile, HYBE is still speeding up procedures to conduct IPO in 2020.
The state of Si Hyuk is said to have illegally profited 190 billion won (about 140 million USD), including 30% of the proceeds from selling shares of private investment funds.
In a phone interview with The Hankyoreh, former ADOR CEO Min Hee Jin responded to the fraud allegations of Chairman Bang Si Hyuk.
Min Hee Jin said, In January 2019, when I met with the State Chairman directly to negotiate the annual salary, he told me, We dont have any plans to list and suggested, Cash is better than stocks (to encourage). Replace with a bonus when signing the contract".
"Contract bonus" is an annual bonus in addition to salary. I believe the President and sign the contract, Min Hee Jin added, adding that another recruiting employee also knew about this.
Min Hee Jin then joined Big Hit Entertainment as a Brand Director (CBO) in July 2019, then became CEO of HYBE's subsidiary ADOR. This statement was submitted as evidence in the lawsuit over the right to sell shares between Min Hee Jin and HYBE at the Seoul Central District Court on September 11.
Meanwhile, the investigation unit suspected that the private equity fund (PEF) established by a close associate of Bang Si Hyuk in April 2019 was a planned fund to purchase shares from investors, benefiting from HYBEs IPO.
In fact, just 2 months after its establishment, in June 2019, the fund bought about 25 billion won in shares from the co-founder and vice president of HYBE, and began accumulating HYBE shares.
Management agencies are questioning whether current investors, including the vice president, are selling their stocks at low prices, as they believe Bang Si Hyuk's claim that HYBE had no plans to IPO at the time.
The fund, after gathering its shares, began selling strongly after HYBE's IPO in October 2020, earning nearly ten times more in profits. About 30% of the profit is believed to have gone into Bang Si Hyuk's pocket.
Chairman Bang Si Hyuk was questioned by the police for 13 hours on September 15.
