One month after the Fair Trade Commission (FTC) launched an investigation into HYBE for failing to report designated data, it was announced that the FTC will proceed with the investigation, despite HYBE submitting a correction report claiming the omission was a simple mistake. If the investigation uncovers evidence of intentional and significant omission of data, HYBE’s CEO, Bang Si-hyuk, may face criminal consequences as the company’s chairman.
On August 2, HYBE submitted a correction report to the Financial Supervisory Service’s electronic disclosure system (DART) regarding the status of a foreign affiliate owned by the chairman’s family. The report, filed on July 26, stated that the omission of the US-based real estate company “BEL AIR STRADELLA, LLC,”which is fully owned by Bang Si-hyuk, was due to a simple oversight.
According to reports, the purchase of a luxury mansion worth approximately 36.5 billion KRW (26.4 million USD) was made by HYBE Chairman Bang Si-hyuk through this real estate firm. HYBE clarified that as a large enterprise group subject to disclosure, they were obligated to disclose this transaction and it was simply an oversight in their practical work, which has now been rectified.
The FTC designates enterprise groups targeted for disclosure every May. This designation applies to groups with assets of 5 trillion KRW or more as of the end of the previous year. This year, a total of 88 enterprise groups (including 3,318 affiliates) were designated, with the notable inclusion of HYBE, an entertainment company group.
By May 31, the designated companies and their owners (including chairpersons) are required to disclose a variety of obligations, including but not limited to the company’s overview, financial status, status of foreign affiliates, and any transactions involving a special relationship.
The FTC conducted an on-site investigation at HYBE on June 24 due to suspicions of omission in the data regarding the company’s designation as a large enterprise. Even though HYBE voluntarily corrected the omission, the FTC intends to proceed with its investigation. According to an FTC official, their investigation will determine if the omission was a genuine mistake, as stated by HYBE, or a deliberate attempt to hide information.
Origin: Naver
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