Bang Si Hyuk 400B KRW Stock Fraud Probe: Prosecutors reject 2nd raid on BTS’ agency HYBE, know what’s next

There is a vital constructing within the continued monetary investigation inspiring HYBE founder and chairman Bang Si Hyuk. South Korean prosecutors like some other time denied a police ask to switch making an attempt HYBE’s headquarters. The ask used to be submitted as half of a deepening probe into doable securities fraud.

The Seoul Southern District Prosecutors’ Dwelling of job refused to command the warrant, offering no legit clarification for their risk. This marks the 2d time investigators had been blocked from obtaining bodily proof from the leisure huge’s areas of work.

Police’s subsequent concept

That is no longer the first time police like tried to attain a warrant. Their initial ask used to be submitted in April but used to be turned down by the prosecution. After gathering extra testimony and reviewing monetary data, authorities submitted a revised application. They had been hoping for a assorted consequence, most efficient to be met with the identical rejection.

Primarily based fully on sources within legislation enforcement, prosecutors would possibly per chance merely deem the contemporary proof lacks the weight desired to elaborate a raid on HYBE’s areas of work. That hasn’t stopped the police, who’re talked about to be getting ready a third and more detailed warrant ask.

The core of the case

The investigation centers around a 400 billion KRW (approximately 293 million USD) transaction. It took region in 2019, a year forward of HYBE’s initial public offering. Primarily based fully on The Korea Economic Day-to-day, the Financial Supervisory Service (FSS) uncovered key paperwork within the case. These suggest that Bang Si Hyuk inspired early HYBE shareholders to sell their stakes. The consumers had been reportedly a non-public equity firm speed by undoubtedly one of his acquaintances.

The controversy lies in what Bang allegedly did not expose: a secret 30% commission he got from the deal. It effectively earned him tons of of billions of obtained whereas maintaining investors within the ineffective of night time. These earnings reportedly did not appear in HYBE’s legit monetary disclosures filed sooner than the IPO.

Deceptive investors forward of IPO?

A pair of shareholders like since reach forward, alleging that Bang explicitly downplayed any plans for an IPO when persuading them to sell their shares. These investors snort they made monetary choices per incomplete or deceptive knowledge. They had been unaware that Bang and his team had been already working within the support of the scenes to organize HYBE for a stock market debut.

Documents obtained by the FSS reportedly screen that HYBE had begun securing audit certifications, correct consultations, and IPO-linked filings at the time the shares had been being equipped. It at as soon as contradicts what Bang allegedly communicated to shareholders. As soon as HYBE went public, its valuation soared, leaving folk who equipped early feeling duped and financially deprived.

Could per chance moreover Bang face penal advanced time?

The case is now being examined beneath the lens of South Korea’s Capital Market Act. It prohibits the usage of insider knowledge and mandates pudgy disclosure of any monetary preparations that will per chance merely have an effect on shareholder value.

If prosecutors resolve that Bang knowingly misrepresented HYBE’s IPO intentions, he is vulnerable to be charged with securities fraud. The crime carries penalties starting from hefty fines to existence imprisonment.