Bang Si Hyuk, chairman of HYBE, has been accused of fraudulent trading and reported to prosecutors by South Korea’s financial authorities.
The controversy is growing following revelations that the National Pension Service (NPS) was among the institutional investors in the fund allegedly involved in the misconduct.
Critics argue that a portion of the public's retirement savings was effectively used to enrich a private individual. This has raised serious concerns about the oversight and accountability of the NPS. In a video published on July 16 on the YouTube chann Apkwon, Kwon Soon Woo, a former journalist at Money Today, explained that the Securities and Futures Commission found Bang’s fund orchestrated transactions that misled earlier investors, resulting in significant profits.
“They concluded that Bang’s fund manipulated trades to secure over 1 trillion KRW (approximately $720 million) in gains, with approximately 400 billion KRW (approximately $287.4 million) of that going directly to Bang,” said Kwon. “However, that money should have gone to the original shareholders who held the stock before it was sold.”
Kwon emphasized that the victims were the earlier investors in the fund, including large institutions such as pension funds. “These funds were managing money on behalf of entities like the National Pension Service,” he explained. “That means this was essentially public money. If the alleged fraudulent actions had not taken place, the expected profit of around 1 trillion KRW (approximately $720 million) would have flowed back to the public through the pension fund.”
In other words, profits that should have gone to public retirement accounts ended up in the hands of Bang and related investment funds. “If you trace the origin of the 400 billion KRW (approximately $287.4 million) that Bang earned, it is clear that it came from money that belonged to the public,” Kwon stated.
He also pointed out that the fund managers who were allegedly defrauded held fiduciary duties. “If they failed to protect investors' assets and could not deliver expected returns due to negligence, they too could be held liable,” he said. “This is not just a management failure. It may require compensation to those affected.”
Kwon raised additional concern that most citizens are unaware they may have been harmed. “The real problem is that people do not know they have suffered a loss,” he said. “But just because they are unaware does not mean it should be ignored.”
He further noted that the potential profits that would have gone to public investors were instead taken by private entities. “Would Bang and those funds have made more than 1 trillion KRW (approximately $720 million) if there were no victims? That money was supposed to go to the pension fund,” he argued.
Kwon added that public money is often the easiest target for large-scale exploitation. “Bang received 400 billion KRW (approximately $287.4 million), while the public unknowingly suffered the loss,” he said. “We must recognize this as our own money.”
He concluded by urging pension funds to take legal action. “Now that the Securities and Futures Commission has decided to file a complaint, public institutions like the National Pension Service should not avoid responsibility. They need to take legal action, including demanding damages from Bang Si Hyuk and other involved parties, to protect public assets.”
In response, HYBE said, “It is unfortunate that the explanation provided by our largest shareholder during the investigation was not accepted. He clearly stated that there was no intention to pursue personal gain related to the company's listing. We respect the decision of the authorities and will do our best to resolve the allegations during the upcoming legal process to regain the trust of the market and our stakeholders.”
SEE ALSO: South Korea’s SFC refers HYBE’s Bang Si Hyuk to prosecutors for suspected market manipulation
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