It has been reported that HYBE's former Chief Investment Officer (CIO) Kim Joong Dong, believed to have led the company's alleged unfair share trading plan alongside chairman Bang Si Hyuk, is hiding out in the United States since June of this year, possibly to avoid indictment.
[Note: As of October 29 EST, some wording in this article has been corrected after its initial publication per request by HYBE Labels.]
According to the investment banking industry and investigative authorities on October 22 KST, the Financial Crime Investigation Unit of the Seoul Metropolitan Police has been unable to get a hold of Kim Joong Dong (top left in photo above) for an in-person investigation on potential violations of the Capital Markets Act.
Since earlier this summer, the police have conducted investigations with Bang Si Hyuk and 4 other suspects on suspicions of illegally profiting from the sale of HYBE Labels stocks soon after the company's public listing in 2020. Kim Joong Dong, however, departed for the United States around June of this year, and has since refused to answer police requests for an investigation.
It's believed that the police will find it difficult to summon Kim for questioning, as he holds U.S. citizenship.
Meanwhile, investment banking insiders point to Kim Joong Dong as a key figure in the billion-dollar profit scheme. In 2019, Kim Joong Dong, Bang Si Hyuk, and others allegedly coerced shareholders of Big Hit Entertainment into selling their shares, claiming that the company had no plans to go public. [HYBE Labels continues to deny these claims, insisting that Bang informed investors that an IPO "may be delayed."] As a result, Kim, Bang, and others were able to secure significant shares through private equity funds set of by Kim Joong Dong and others. Then, when HYBE listed as a public company in 2020, they sold approximately 9.16% of HYBE's shares, pocketing a total of 360 billion KRW (~ $250 million USD) in profits. Of the total profits, it's said that Kim Joong Dong himself pocketed approximately 100 billion KRW (~ 70 million USD). Previously, it was reported that Bang Si Hyuk separately pocketed around 190 billion KRW (~ 132 million USD) from this scheme.
The Seoul Metropolitan Police plan on conducting additional investigations into Bang Si Hyuk and 4 other suspects currently based in South Korea.
SEE ALSO: HYBE Chairman Bang Si Hyuk undergoes second police questioning over stock manipulation allegations
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