Will BTS’ agency chairman Bang Si Hyuk face life in prison? Inside 400 Billion KRW stock scandal shaking HYBE

South Korea’s financial watchdog is intensifying its probe into HYBE (BTS model) chairman Bang Si Hyuk. Reports emerged that the Monetary Supervisory Carrier (FSS) is making prepared to formally ask of a felony investigation. The topic revolves spherical a doubtlessly unlawful transaction from 2019.

It is miles allegedly tied to misleading investment practices and undisclosed profit-sharing arrangements, raising severe concerns below the Capital Markets Act. The case facilities on a 400 billion KRW (roughly 290 million USD) deal. It will probably also, if proven to be fraudulent, checklist the entertainment filthy rich individual to severe ethical penalties, including lifestyles imprisonment.

Allegations of deception in pre-IPO actions surface

At the heart of the investigation is a bid that Bang Si Hyuk, earlier than HYBE’s public list, deliberately misled traders referring to the company’s IPO plans. In accordance with sources within the financial industry, the FSS’ Investigation Department 2 has uncovered evidence. It suggests that in 2019, Bang informed HYBE shareholders that there had been no immediate plans to circulate public.

This assurance reportedly led some traders to sell their shares, unaware that the company used to be quietly progressing in direction of an IPO. With out a doubt, HYBE used to be taking strategic steps indicative of an forthcoming public offering, including applying for a designated auditor. The shares had been allegedly purchased by a non-public equity fund (PEF) created by an associate of Bang Si Hyuk. It is miles an entity with which he is now believed to own had undisclosed financial ties.

Secret profit-sharing agreement uncovered

Extra investigation by the FSS reportedly printed that Bang had entered correct into a non-public profit-sharing agreement with the aforementioned PEF. This deal allegedly allowed Bang to for my share accumulate spherical 30% of the fund’s earnings. This in a roundabout method earned him an estimated 400 billion KRW through the transaction.

Seriously, these arrangements and financial advantages weren’t disclosed in HYBE’s IPO registration paperwork. Regulators imagine this lack of disclosure can also qualify as fraudulent and unfair trading.

A pair of authorities now all in favour of the investigation

As the FSS prepares for its investigation, reports level to that the agency will post a rapid-tune referral to the prosecution. The rapid-tune mechanism is in overall reserved for excessive-priority conditions provocative graceful-scale financial misconduct. Simultaneously, the Monetary Crime Investigation Unit of the Seoul Metropolitan Police Agency is additionally conducting a parallel investigation.

The case has won momentum months after preliminary media reports wondered potential irregularities surrounding HYBE’s IPO. At the initiating treated as a disclosure-connected misfortune, the topic has since been reclassified as a elephantine-fledged securities fraud investigation.

Staunch ramifications will most seemingly be severe

The implications of the case are profound. If authorities verify that the alleged earnings had been indeed earned through unlawful capacity, Bang Si Hyuk can also face punishment below Article 443 of the Capital Markets Act. This statute mandates a minimal sentence of five years, and in conditions the save unlawful earnings exceed 5 billion KRW, the court docket can also impose lifestyles imprisonment.

A spokesperson for HYBE has issued a transient commentary declaring that all enterprise dealings had been conducted below ethical supervision and adhered to the boundaries of most modern felony guidelines. On the change hand, that has no longer eased growing scrutiny from every regulators and the public.