SEOUL, December 05 (AJP) - Shares of South Korea's entertainment giant HYBE slid more than 1 percent early Friday after a Seoul court approved the prosecution request for a freeze on the stock holdings of its founder and largest shareholder Bang Si-hyuk worth 156.8 billion won ($106 million) while the investigation on malpractice related to pre-listing share transactions proceeded.
The KOSPI-trading shares are down 1.4 percent at 291,250 won as of 9:40 a.m. in Seoul. Bang owns 13.151,394 shares or 30.5 percent of HYBE.
The Seoul Southern District Court approved the pre-indictment asset freeze, according to legal officials briefed on the case. The move prevents Bang from disposing of the frozen HYBE shares while prosecutors determine whether they represent illicit gains. If wrongdoing is confirmed, the government may seize assets equal in value to those profits.
The Seoul Southern District Prosecutors’ Office filed the request following a recommendation from the Seoul Metropolitan Police Agency’s financial crimes unit, which has been probing the case for several months.
The allegations stretch back to 2019, when HYBE — then still known as Big Hit Entertainment — was preparing for what would become one of Korea’s most closely watched IPOs. Investigators say Bang told existing HYBE investors and private equity partners that he had no plans to pursue a public listing, shaping the terms of share transactions at the time.
Authorities now allege that, contrary to those assurances, Bang had already entered into a confidential agreement that would allow him to sell part of his stake once the company went public. When HYBE’s valuation soared after its 2020 IPO, police believe Bang realized approximately 190 billion won in gains tied to that undisclosed arrangement.
Prosecutors argue that this alleged concealment may constitute investor fraud, prompting the freeze to prevent any movement of shares that could later be subject to seizure.
HYBE, in a statement, downplayed the significance of the ruling. “The asset freeze is a standard procedure and does not imply guilt,” a spokesperson said. “We are cooperating fully with the investigation and await the authorities’ decision.”
Bang has not been indicted, and the court’s action does not determine the merits of the case. But the size of the freeze — among the largest imposed in recent entertainment-industry investigations — underscores both Bang’s outsized role in Korea’s cultural economy and the scale of the alleged financial misconduct.
The investigation remains ongoing, with prosecutors expected to decide in the coming months whether to formally charge the HYBE chairman.
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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