The police investigation into allegations of fraudulent trading involving HYBE Chairman Bang Si Hyuk is now close to its conclusion.
At a regular press briefing on December 15, Seoul Metropolitan Police Agency Commissioner Park Jeong Bo confirmed that the case is in its final stage.
He said the investigation into Chairman Bang is nearly complete and that authorities are carefully reviewing legal principles to make sure the case is wrapped up thoroughly and without any remaining doubts. He also stated that police are currently considering whether to request an arrest warrant.
The case centers on events that took place in 2019, a year before HYBE, then known as Big Hit Entertainment, went public. Police believe Chairman Bang Si Hyuk misled existing investors by telling them there were no plans for an initial public offering.
Based on that information, those investors reportedly sold their shares to a special purpose company created by a private equity fund linked to HYBE executives.
Investigators suspect that the HYBE chairman had a prior non-disclosure agreement with the private equity fund that entitled him to 30 percent of the profits after HYBE’s IPO. When the fund later sold its shares following the company’s successful listing in October 2020, he allegedly received around 190 billion won in illicit gains.
The investigation has been extensive and has unfolded over several months. On June 30, police raided the Korea Exchange in Yeongdeungpo, Seoul, to secure documents related to HYBE’s IPO review process.
On July 24, they carried out a search at HYBE’s headquarters in Yongsan. Bang Si Hyuk was also placed under a travel ban and summoned for questioning five times.
The questioning sessions were reportedly long and intense. His first appearance before police in mid-September lasted more than 14 hours, followed by another session a week later that ran over 12 hours.
Since then, he has continued to cooperate with investigators. When he first appeared for questioning, Bang Si Hyuk apologized for causing concern and said he would fully cooperate with the investigation.
Earlier this month, a court approved the provisional seizure of Bang’s HYBE shares, valued at about 156.8 billion won. This move is believed to be tied to the alleged illicit profits under investigation.
His legal team has strongly denied any wrongdoing. They maintain that all procedures related to HYBE’s IPO were carried out in full compliance with the law. They stated that there are no legal issues with how the company went public.
The case is being reviewed under the Capital Markets Act, which prohibits gaining financial benefits through false or misleading statements related to unlisted shares. Once police complete their review, the case is expected to be handed over to prosecutors, who will decide on the next legal steps.
This investigation is also happening alongside other challenges facing HYBE. The company is currently undergoing a special tax audit related to its IPO, and it remains locked in a high-profile legal dispute with Min Hee Jin, the former CEO of subsidiary label ADOR. During court proceedings, Min claimed she was used as a “sacrifice” to boost HYBE’s corporate value ahead of its stock market debut.
The final decision on whether an arrest warrant will be requested could have major implications, not only for Chairman Bang but also for HYBE.
