HYBE Chairman Bang Si-hyuk to Undergo Police Investigation Today (15th) Over Alleged Fraudulent Trading

HYBE Chairman Bang Si-hyuk is scheduled to undergo a police investigation today, the 15th, concerning allegations of fraudulent trading.

According to the Seoul Metropolitan Police Agency's Financial Crimes Investigation Unit, Bang is expected to appear at the Mapo Police Station at 10 AM for questioning. As public appearances are the norm, he is anticipated to pass through the press's photo line prior to entering the station.

Bang is accused of deceiving existing HYBE investors, including venture capital firms, before the company's IPO in 2019. He allegedly misled them into believing there were no IPO plans and induced them to sell their shares to a special purpose company (SPC) established by a private equity fund with which he is associated. This falls under allegations of fraudulent trading under the Capital Markets Act.

Following the share sale to the SPC, HYBE proceeded with its IPO. It is understood that Bang subsequently received 30% of the capital gains from the private equity fund's sale, pocketing an alleged illicit profit of approximately 190 billion KRW. However, financial authorities contend that HYBE was already in the process of its IPO pre-procedure, including applying for designated audit, at the time of the share sale.

This suggests that Bang, despite having a clear intention to go public, allegedly used deceptive tactics about the absence of IPO procedures to secure profits. In relation to these allegations, the police seized data related to HYBE's listing review from the Korea Exchange in late June and raided HYBE's headquarters last month. The Securities and Futures Commission also filed a complaint against Bang with the prosecution in mid-August. The Financial Supervisory Service's special judicial police are also investigating the same matter under the direction of the Seoul Southern District Prosecutors' Office. The National Tax Service also initiated a tax audit of HYBE last month.

Bang had previously communicated to HYBE employees via email that he would expedite his return from the US, where he was staying, to prioritize the authorities' investigation procedures. He stated, "I will do my best to explain and resolve all circumstances so that my personal issues do not become an obstacle for you all." He returned to Korea on the 11th of last month.

Bang Si-hyuk is widely recognized for his role in conceptualizing and successfully launching the K-pop group BTS. As the founder and largest shareholder of HYBE Corporation, he wields significant influence in the entertainment industry. His recent aggressive business maneuvers include participating in the acquisition bid for SM Entertainment through HYBE.