Bang Si-hyuk, the chairman and founder of K-pop entertainment giant HYBE, is scheduled to undergo police questioning next week regarding allegations of fraudulent securities transactions connected to the company's stock market listing. The investigation centers on claims that Bang deliberately misled investors about the timing of HYBE's initial public offering to benefit financially from stock transactions.
Law enforcement officials announced that Bang will be questioned on Monday about accusations that he deceived investors in 2019 by falsely claiming that HYBE's initial public offering would be delayed. Authorities allege that Bang used this misleading information to convince investors to sell their shares to a special purpose company (SPC) that was established by a private equity fund with direct ties to himself.
The alleged scheme involved investors selling their shares to the SPC based on Bang's representations about the delayed IPO timeline. However, financial authorities believe that HYBE was already actively preparing for its public listing at the time these transactions occurred. This suggests that Bang may have had insider knowledge about the company's true IPO plans while providing false information to other shareholders.
After HYBE successfully went public, the SPC proceeded to sell its acquired shares, generating substantial profits from the transactions. According to the allegations, Bang received approximately 30 percent of the profits from these share sales, as stipulated in a previously established shareholder agreement. This arrangement potentially allowed Bang to profit significantly from the alleged deception of other investors.
The police investigation into this case began in late 2024 and has escalated significantly in recent months. In June, authorities conducted a search of the Korea Exchange to seize documents related to HYBE's listing process. The following month, police raided HYBE's headquarters as part of their ongoing investigation, demonstrating the serious nature of the allegations.
In addition to the police investigation, the Securities and Futures Commission, which operates under the Financial Services Commission, is conducting its own separate inquiry into the alleged securities violations. This dual investigation approach indicates that both criminal and regulatory violations may be under consideration.
Last month, Bang addressed the investigation in an internal email sent to HYBE employees, in which he pledged his full cooperation with the ongoing legal proceedings. This public commitment to cooperation suggests that Bang is taking the allegations seriously and is prepared to participate in the investigative process. The outcome of next week's questioning could significantly impact both Bang's personal legal situation and HYBE's corporate reputation in the competitive K-pop entertainment industry.
