HYBE shares turned lower in intraday trading after news that police applied for an arrest warrant for Chairman Bang Si-hyuk, weighing on investor sentiment and erasing most early gains.
According to the Korea Exchange, HYBE was trading at 249,500 won as of 2:10 p.m., down 2.16% from the previous session.
The stock opened at 258,000 won, up 1.18% from the prior close, and rose early before reversing course.
Earlier in the day, the Seoul Metropolitan Police Agency’s Financial Crimes Investigation Unit said it had applied for an arrest warrant for Bang on suspicion of fraudulent unfair trading. The move came about five months after Bang was first questioned in mid-November last year.
Police allege that in 2019 Bang misled HYBE investors by saying there were no plans for a stock listing, prompting them to sell their stakes to a specific private equity fund, and then proceeded with an initial public offering.
Police also said they believe Bang received about 30% of the post-listing sale profits under a nonpublic contract with the private equity side, earning an estimated 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 violations result 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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