HYBE Fails to Disclose Affiliate ‘Ocean Drive Investment’ Established by CEO Park ********

Amid controversy over HYBE underreporting its revenue and failing to pay approximately 120 million KRW in waste levies, it has been confirmed that the company also omitted an affiliate from its disclosures. The omitted affiliate is ‘Ocean Drive Investment,’ a company founded by Park Ji-won, former CEO of HYBE. This company became a HYBE affiliate immediately after its establishment on September 29, 2021, but HYBE did not disclose this fact until the Large Business Group Status Disclosure on June 18 of this year.

Regarding HYBE’s failure to disclose its affiliate, a Financial Supervisory Service official stated, “The Large Business Group Status Disclosure determines subsidiary status under the Fair Trade Act, and it appears Ocean Drive Investment fell under this category and was therefore disclosed. However, in the case of business reports, the determination is made under the External Audit Act (Act on External Audit of Stock Companies, etc.), under which it is not considered a subsidiary. Nevertheless, it is still an affiliate. Therefore, we informed HYBE to include Ocean Drive Investment in the list of affiliates in its business reports as well. HYBE responded that they ‘were not well aware of the criteria.’”

In response, HYBE stated only that “The company disclosed affiliates of the same person and persons related to the same person following the designation as a business group subject to disclosure, and Ocean Drive Investment has no business relationship with our company.”