HYBE CEO Bang Si-hyuk (Photo / YTN Screenshot)
South Korean police have moved to secure the detention of Bang Si-hyuk, chairman of HYBE, as part of an ongoing investigation into alleged fraudulent practices linked to the company’s pre-IPO stock transactions.
The Seoul Metropolitan Police Agency’s Financial Crimes Investigation Unit said on April 21 it had filed for an arrest warrant against Bang on charges of fraudulent unfair trading under the Capital Markets Act. The decision comes roughly five months after he was last questioned by authorities in November, marking a significant escalation in the probe.
Allegations tied to pre-IPO transactions
According to investigators, Bang is suspected of misleading existing shareholders during a 2019 share purchase process prior to HYBE’s stock market listing. Police allege that while the company was actively preparing for its initial public offering, Bang conveyed the impression that the listing would be delayed, influencing shareholders’ decisions to sell their stakes.
Authorities are also examining claims that shares held by existing investors were sold to a special purpose company (SPC) established by a private equity fund allegedly linked to HYBE executives. Investigators suspect that following the company’s successful listing, Bang may have realized approximately 190 billion won (around $140 million) in illicit gains through transactions involving the fund.
A significant portion of the affected investors were institutional, with reports indicating that funds tied to the National Pension Service were among those involved. The Capital Markets Act prohibits obtaining financial benefits through deception or unfair schemes in connection with unlisted shares, with penalties including life imprisonment or a minimum of five years in prison if gains exceed 5 billion won.
Investigation timeline and response
Police have reportedly questioned Bang five times as a suspect and conducted an extended legal review before seeking the warrant. He was also placed under a travel ban in August last year, limiting his overseas activities during the investigation.
The prolonged inquiry has affected Bang’s external engagements. Reports indicated that the U.S. Embassy in Seoul recently sent a letter to Korean authorities requesting cooperation regarding his potential visit to the United States, citing activities related to BTS and its world tour. Seoul police officials, however, stated they had not formally received such a request, adding that any future consideration would be handled in accordance with legal procedures.
Bang has maintained that all actions taken during HYBE’s listing process complied with applicable laws and regulations, asserting that there are no legal violations. The company has not issued a detailed public statement beyond reaffirming this position.
Industry implications
The case is being closely watched across the entertainment and financial sectors, given HYBE’s position as one of the most influential companies in the global music industry. Any legal outcome could carry broader implications for governance standards and investor transparency within South Korea’s fast-growing K-pop business landscape.
While the court has yet to decide on the arrest warrant, the move underscores intensifying scrutiny on corporate practices tied to high-profile entertainment firms. The investigation remains ongoing.
Allen Shin is an editor at Kpopbreaking.com, specializing in K-pop industry news, artist activities, and breaking developments.
📧 Contact: worldpopkorea@gmail.com
Comments