Police have requested an arrest warrant for Bang Si Hyuk, chairman of HYBE.
The Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced on the 21st that they have applied for an arrest warrant for Bang on charges of fraudulent and unfair trading, according to Yonhap News.
Bang is accused of misleading HYBE investors in 2019 by stating that there were no plans for a stock listing, which led them to sell shares to a specific private equity fund before the company eventually went public.
The police believe that Bang, under a confidential agreement with the private equity fund, received 30% of the profit from sales after the IPO, earning nearly 200 billion won in illicit gains.
The Capital Markets Act prohibits obtaining financial benefits through false statements or fraudulent schemes related to financial investment products, including unlisted stocks.
Violating this law and gaining profits exceeding ₩5.00 billion KRW (about $3.40 million USD) can result in life imprisonment or a prison term of five years or more.
After receiving intelligence on these allegations at the end of 2024, police conducted raids on the Korea Exchange, HYBE, and others in June and July of last year and imposed a travel ban on Bang.
As the police investigation has prolonged, Bang is reportedly facing several restrictions on his public activities.
The U.S. Embassy in South Korea recently sent a letter to the police requesting cooperation for Bang’s visit to the United States, citing the BTS group’s world tour as the reason.
Bang maintains that he complied with all relevant laws and regulations at the time of the company’s IPO and insists there are no legal issues.