The Seoul Southern District Court has approved a request to freeze 156.8 billion won worth of HYBE shares owned by Chairman Bang Si Hyuk. As reported by Yonhap News on December 4, the court made the decision on November 19, last month.
This type of asset freeze, called a pre-indictment preservation order, is meant to prevent assets suspected of being obtained illegally from being sold or transferred before a court reaches a final verdict.
If the court later orders the confiscation of illegal profits, the frozen assets ensure that the authorities can recover them. Normally, illegal profits are seized directly, but if the money has already been spent or lost, authorities can seize equivalent assets instead.
The case was filed by the Seoul Southern District Prosecutors’ Office following a request from the Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency.
A HYBE official stressed, “The provisional seizure is a routine procedure and not a judgment on guilt or innocence.” They added, “We have responded sincerely during the investigation and provided explanations, and we are waiting for the authorities’ decision.”
Bang Si Hyuk is accused of deceiving HYBE investors in 2019. He allegedly told them that the company had no plans to go public and urged them to sell their shares to a private equity fund.
After HYBE was listed on the stock market, the fund sold the shares for profit. Police suspect that Bang earned around 190 billion won by receiving 30 percent of the post-listing profits under a confidential agreement with the fund.
The investigation has involved multiple agencies. Police have questioned the HYBE Chairman several times since September and have imposed a travel ban on him since August. They also conducted raids at HYBE headquarters and the Korea Exchange.
The Financial Supervisory Service has determined that the alleged actions amount to fraud under the Capital Markets Act. Meanwhile, the National Tax Service has opened a separate investigation into whether taxes were evaded during the share transaction.
The court’s decision to freeze the shares ensures that the assets remain secure while the investigation continues. HYBE has emphasized that the order is a routine legal step and does not imply any wrongdoing.