HYBE Request Investigation Into ADOR Selling Stock Just Before Dispute In Anticipation Of Stock Price Drop

On May 14th, Investment Bank (IB) reported that HYBE intends to file a petition with the Financial Supervisory Service on the same day, seeking an inquiry into Deputy CEO S for potential violations of the Capital Market Act. These alleged violations include the dissemination of rumors and the use of undisclosed information.

HYBE has also requested the Financial Supervisory Service to investigate other executives of ADOR, including CEO Min Hee-jin. This investigation was prompted by allegations of fraudulent transactions and market manipulation, such as spreading false information about HYBE’s artists plagiarizing another artist in order to negatively impact the stock price and cause losses for investors.

HYBE has accused ADOR’s Deputy CEO S of selling 950 shares of HYBE worth 200 million won on April 15th using undisclosed information. This sale occurred just one day before ADOR executives, including CEO Min Hee-jin, sent an email alleging poor management and discrimination by HYBE towards ADOR. As a result, HYBE believes that Deputy CEO S anticipated a drop in HYBE’s stock price once the email was made public, leading to his decision to sell his shares beforehand.

On April 15th, 950 shares of S were sold at an average price of 214,605 won per share, resulting in a total of 203.87 million won. HYBE has alleged that Deputy CEO S attempted to prevent losses of tens of millions of KRW as the company’s stock price declined to the 190,000 KRW range due to an internal conflict after an audit was conducted regarding CEO Min Hee-jin’s suspected takeover of management.

CEO Min Hee-jin stated that the audit of HYBE was made public on the 22nd, which was after the sale of the stock. Therefore, it is illogical to assert that the shares were sold in anticipation of this event. Deputy CEO S also dismissed the accusation, asserting that they had no prior knowledge of the audit being launched on the 22nd. They sold the stock for the sole purpose of raising funds for a down payment on a house, with no other ulterior motives.

HYBE has also urged the Financial Supervisory Service to launch an investigation into CEO Min Hee-jin, accusing her of deliberately foreseeing the decline in the company’s stock price and colluding to manipulate public perception. Furthermore, HYBE intends to present proof, including Kakaotalk conversations obtained during the audit, to support their claim that Min Hee-jin and other executives were anticipating a decrease in the stock price beforehand.

One of the messages in the conversation on March 16th revealed that Deputy CEO L had predicted a significant decrease in stock price if the ADOR dispute was made public. CEO Min Hee-jin responded with a simple agreement. On April 3rd, in a Kakaotalk group chat with CEO Min Hee-jin, Deputy CEOs S and L, and internal director K, L reiterated their belief that the stock price would suffer greatly in the event of a legal dispute. They also mentioned the possibility of minor shareholders suing HYBE, which would be detrimental to the company as a publicly traded entity.

According to HYBE, during the conversation on April 18th, L proposed a strategy that involved utilizing the process of “Fair Trade Commission > Public opinion > Lawsuits”. The suggestion was to leak information to journalists in order to manipulate the stock price and encourage minor shareholders to sue HYBE, thereby avoiding their direct involvement.

The source of the article can be found at the following link: maketinsight.