Bang Si-hyuk, chairman of HYBE, is facing possible detention after police sought an arrest warrant over allegations he deceived investors during the company’s initial public offering process and gained about 190 billion won in illicit profits. Police moved to secure his custody about 18 months after opening the probe.
The Seoul Metropolitan Police Agency’s Financial Crimes Investigation Unit said Monday it applied for a warrant for Bang on suspicion of fraudulent unfair trading under the Capital Markets Act. The request came about five months after his last questioning in November.
Police suspect that in 2019, ahead of HYBE’s listing, Bang told existing investors the IPO was not planned or would be delayed, then steered them to sell their stakes to a specific private equity fund. After the company later went public and the value of those shares rose, investigators say Bang received a portion of the sale profits under a prior undisclosed agreement.
Police said they believe Bang gained about 190 billion won. Some findings indicate a structure in which roughly 30% of the profit was to be shared with the private equity fund. An SPC set up by the fund was reportedly used in the stake transfers.
The Capital Markets Act bans gaining profits in financial investment transactions through false information or deceptive schemes. If illegal gains exceed 5 billion won, the law allows a sentence of life imprisonment or at least five years in prison.
The investigation began after police obtained a tip in late 2024. In June and July last year, police raided the Korea Exchange and HYBE headquarters to secure IPO-related materials and imposed a travel ban on Bang. From September to November, they questioned him five times and continued reviewing the legal issues.
The case also involved legal disputes, with prosecutors reportedly rejecting initial search warrant requests twice. As the probe dragged on without additional questioning, police faced criticism for moving too slowly.
The warrant request has drawn attention amid a recent diplomatic controversy. The U.S. Embassy in Seoul recently sent police a letter asking that Bang be allowed to travel to the United States. The letter reportedly cited his attendance at events marking the 250th anniversary of U.S. Independence Day in July and the need to support a BTS world tour.
Police said they would review the request “in accordance with law and principle,” but the warrant application has effectively limited his ability to leave the country.
Bang’s side has denied all allegations, saying he did not mislead investors, the share sales were made at investors’ request, and the IPO process complied with relevant laws and rules.
Police said they plan to accelerate the investigation if the court grants the warrant and they take Bang into custody.
* This article has been translated by AI.
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