HYBE calls for investigation into alleged insider trading by Ador executives

The logo of K-pop artist management powerhouse HYBE is seen outside its headquarters in Seoul’s Yongsan district on Friday. Yonhap

By Yi Whan-woo

K-pop artist management company HYBE said on Tuesday that it has asked the Financial Supervisory Service (FSS) to open an investigation into executives at subsidiary Ador who are accused of insider trading in HYBE shares.

The suspicion stems from the weeks-long feud between HYBE and Ador, in which HYBE alleged that Ador CEO Min Hee-jin was secretly trying to take a majority stake in Ador after the company thrived as a subsidiary in HYBE’s multi-label system .

HYBE said it would also request an additional investigation against Min, noting that the executives include Min’s confidant, who serves as vice president.

No further details about the vice president were disclosed.

In a petition filed with the FSS, HYBE said the vice president staged a sale of 950 HYBE shares a week before HYBE launched a comprehensive audit of Ador regarding Min’s alleged management takeover attempt.

HYBE said executives learned of the audit in advance and sold their shares to avoid financial loss due to the high-profile conflict between the two companies.

The 950 shares were collectively worth 203.87 million won before they were sold, with an average price of 214,605 ​​won each.

HYBE, a KOSPI-listed company, saw its stock prices plummet to 190,000 won after the feud.

“The vice president and other executives avoided the loss of tens of thousands of won based on the date (of the audit) and other relevant information they learned about the audit in advance,” HYBE said. “Their stock sales should be considered illegal insider trading, especially considering that the vice president is also broadly classified as a HYBE executive.”

HYBE said it had obtained recordings of conversations between Min and her confidant in a private online chat room about when the disputed shares should be sold.

Min’s side dismissed HYBE’s claim, saying, “We had no idea about the audit until the last minute.”

It said that the sale of the shares was aimed at securing a lump sum for the interim payment for a planned new office.