According to Investment Bank (IB) on May 14th, HYBE plans to submit a petition to the Financial Supervisory Service on the same day requesting an investigation into Deputy CEO S on charges of violating the Capital Market Act, including spreading rumors and using undisclosed information.
In addition, HYBE has also decided to request the Financial Supervisory Service to investigate other ADOR executives, including CEO Min Hee-jin. Regarding the reasons for the investigation, the agency specified allegations of fraudulent transactions and market manipulation, such as spreading false information that artists under HYBE’s label plagiarized another artist to create a negative impact on the stock price and cause losses to investors.
HYBE filed a complaint against ADOR’s Deputy CEO S, knowing that they sold 950 HYBE shares worth 200 million won on April 15th using undisclosed information. The timing of S’s stock sale was one day before ADOR executives, including CEO Min Hee-jin, sent an email raising various allegations about HYBE’s poor management and discrimination in treatment toward ADOR. Therefore, HYBE suspects that Deputy CEO S sold his shares beforehand expecting that HYBE’s stock price would inevitably drop once the email sparked controversy.
The average selling price of 950 shares S sold on April 15th was 214,605 won per share, totaling 203.87 million won. HYBE claims that Deputy CEO S tried to avoid losses amounting to tens of millions of KRW as HYBE’s stock price plummeted to the 190,000 KRW range as an internal conflict broke out after HYBE conducted an audit over CEO Min Hee-jin’s alleged management takeover.
CEO Min Hee-jin said, “HYBE’s audit was publicly disclosed on the 22nd, which was after the stock sale. It doesn’t make sense to claim that the shares were sold in anticipation of this”. Deputy CEO S also refuted the allegation, saying “There was no way that I could know the audit would be launched on the 22nd. I sold the stock solely to raise funds for a down payment on a house. I had no other motives”.
HYBE has also requested the Financial Supervisory Service to investigate CEO Min Hee-jin for allegedly anticipating the drop in the company’s stock price and conspiring to manipulate public opinion. In addition, HYBE plans to submit evidence, including Kakaotalk conversations obtained during the audit, to prove that Min Hee-jin and other executives expected the stock price to fall in advance.
Among the messages, the conversation on March 16th showed Deputy CEO L predicting a significant drop in stock price if ADOR dispute became known to the public. In response to L’s message, CEO Min Hee-jin said, “Of course”. Later on April 3rd, in a Kakaotalk group chat including CEO Min Hee-jin, Deputy CEOs S and L, and internal director K, L said the stock price would plummet if a legal dispute arose. They added that minor shareholders would likely sue HYBE for that, which would be disadvantageous for HYBE as a listed company.
According to HYBE, the conversation on April 18th also showed L discussed a strategy, citing the process as “Fair Trade Commission > Public opinion > Lawsuits”. L suggested that leaking information to journalists to cause a crash in the stock price and prompting minor shareholders to sue HYBE could be a way to avoid their direct involvement.
Source: maketinsight
