[Breaking News] Police transfer HYBE Chairman Bang Si-hyeok to Prosecution Service on suspicion of fraudulent market manipulation without detention

*This content was translated by AI.

The police have transferred HYBE Chairman Bang Si-hyeok to the Prosecution Service without detention, applying charges of fraudulent market manipulation.

On the 3rd, the Seoul National Police Agency's Metropolitan Crime Investigation Division's Financial Crime Investigation Team announced that they have sent five individuals, including Chairman Bang Si-hyeok, HYBE executives, and private equity fund officials, to the Seoul Southern District Prosecutors' Office without detention on suspicion of fraudulent market manipulation under the Capital Markets Act.

This marks approximately 21 months since the police became aware of the case and began investigations prior to filing formal charges.

According to the police, Chairman Bang Si-hyeok and others are suspected of misleading existing HYBE (then Big Hit) investors, including venture capital firms, in 2019 by falsely claiming there were no plans for an initial public offering (IPO), while recommending they sell their shares to a specific private equity fund. The police believe the suspects deceived existing shareholders about the lack of IPO plans, purchased their shares through the private equity fund, and then sold them after the listing, thereby securing approximately 263.1 billion won in unjust profits.

Regarding Kim Jung-dong, former HYBE Chief Investment Officer (CIO), who fled abroad just before the police conducted searches and seizures, an arrest warrant has been issued, and he is now wanted domestically and internationally via Interpol's Red Notice. Additionally, the authorities have applied for pre-indictment asset recovery measures concerning the unjust gains obtained through the alleged crimes, and the court has approved full asset recovery.

Police investigation results revealed that although preparations for an IPO were underway, the suspects recommended selling shares to a private equity fund while misleading existing shareholders about the lack of IPO plans. The private equity fund was found to have recruited investors by guaranteeing a confirmed listing and returns in order to purchase shares from existing shareholders.

A police official explained, "Under the shared goal of profiting from the price difference upon listing, the management concealed information about the planned listing from existing shareholders to secure personal gains. This is deemed an act disrupting the order of the capital markets that undermines its fairness and credibility."

The police had previously applied for arrest warrants twice in April and May, but both were rejected by the Prosecution Service due to failure to complete supplementary investigations.

In response, HYBE has completely denied all allegations against Chairman Bang Si-hyeok and others.

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*This content was translated by AI.