HYBE requests 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, Friday. Yonhap

K-pop artist management powerhouse HYBE said Tuesday it requested the Financial Supervisory Service (FSS) to launch an investigation into executives of the firm's subsidiary Ador, alleging they engaged in insider trading of HYBE stocks.

The suspicion comes from the weeks-long feud between HYBE and Ador, in which HYBE alleged Ador CEO Min Hee-jin secretly attempted to take a controlling stake in Ador after it flourished as a subsidiary in HYBE's multi-label system.

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

Further details of the vice president were not disclosed.

In a petition submitted to the FSS, HYBE said the vice president orchestrated a dumping of 950 HYBE shares a week before HYBE launched a sweeping audit into Ador concerning Min's suspected management takeover attempt.

HYBE said the executives learned about the audit in advance and thus unloaded their shares so that they could avoid a financial loss due to the high-profile conflict between the two companies.

The 950 shares were valued at 203.87 million won combined before they sold them, with each priced at 214,605 won on average.

HYBE, a KOSPI-listed company, saw its share prices tumble to the 190,000 won level after the feud.

"The vice president and other executives avoided losing tens of thousands of won because of the date (of the audit) and other relevant information they learned in advance concerning the audit," HYBE said. "Their sales of stocks should be considered illegal insider trading, especially considering the vice president is also classified as a HYBE executive in a broad sense."

HYBE said it obtained captured images of conversations between Min and her confidant in a private online chat room over when the controversial stocks should be unloaded.

Min's side refuted HYBE's claim, saying, "We had no idea about the audit until the last minute."

It explained the sales of stocks was to secure a lump sum of money for interim payment for a planned new office.