The Fair Trade Commission (FTC) to continue their investigation into HYBE

A month after the Fair Trade Commission investigated HYBE on charges of omission of designated data, it was confirmed that the Commission plans to continue its investigation despite HYBE filing a correction report stating that the matter was a “simple omission.” If the Fair Trade Commission’s investigation reveals that there was “intentionality” and “significance” in the omission of data, HYBE Chairman Bang Si-hyuk, could face criminal punishment.

According to the Financial Supervisory Service’s Electronic Disclosure System (DART) on the 2nd, HYBE filed a correction report on the status of overseas affiliates in which the CEO’s family holds shares on the 26th of last month, citing “simple omission.” It has additionally disclosed 'BEL AIR STRADELLA, LLC', a real estate company located in the United States in which Bang Si-hyuk owns 100% of the shares.

It has been reported that Bang Si-hyuk, chairman of HYBE, purchased a luxury mansion worth approximately 36.5 billion won (26.4 million dollars) through the real estate corporation. HYBE explained, “With the designation of large corporate groups subject to disclosure this time, the corporation also has an obligation to disclose, and in practice, there was a simple omission, so we made a corrective disclosure.”

The Fair Trade Commission conducted an on-site investigation into HYBE on June 24 for suspicions of omission of data designated for large corporations. Although HYBE voluntarily issued a correction, the Fair Trade Commission plans to continue its investigation into the case. An official from the Fair Trade Commission said, “We plan to continuously uncover whether this was a simple omission, as HYBE claims, or a deliberate concealment, through the ongoing investigation.”

However, if additional affiliates are omitted in addition to the affiliates that HYBE voluntarily reported this time, and their assets are excluded from the calculation, thereby avoiding the designation as a “corporate group subject to cross-shareholding restrictions” or engaging in unfair practices such as various profiteering through the omitted affiliates, which is revealed to be so-called “significant,” then they will not be able to avoid punishment.

HYBE’s voluntary correction occurred two months later, well over 10 days late, and retroactive application is unlikely to be possible, as the enforcement decree is scheduled to go into effect on the 7th of next month. According to the Monopoly Regulation and Fair Trade Act, large corporate groups can face criminal punishment for simple omissions or errors in data related to disclosure obligations. The Fair Trade Commission plans to check the missing data and refer to HYBE’s explanation in the future.