HYBE shares turned lower during trading after news that police requested an arrest warrant for Chairman Bang Si-hyuk, weighing on investor sentiment and erasing most early gains.
As of 2:10 p.m., HYBE was down 2.16% from the previous session at 249,500 won, according to the Korea Exchange.
The stock opened up 1.18% at 258,000 won from the prior close and rose early before reversing into negative territory.
Earlier in the day, the Seoul Metropolitan Police Agency’s Financial Crime Investigation Division said it had requested an arrest warrant for Bang on allegations of fraudulent unfair trading. The request came about five months after Bang was first questioned in mid-November last year.
Police allege Bang misled HYBE investors in 2019 by saying there were no plans for an initial public offering, prompting them to sell stakes to a specific private equity fund, and then proceeded with a listing.
Police also said they believe Bang received about 30% of post-IPO sale profits under a nonpublic contract with the private equity side, generating gains of about 200 billion won.
Under South Korea’s Capital Markets Act, it is illegal to obtain financial gains through false statements or improper schemes involving financial investment products, including unlisted shares. If the violation results in profits of 5 billion won or more, the penalty is life imprisonment or at least five years in prison.
* This article has been translated by AI.
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