Police in South Korea have sent a referral to prosecutors regarding Hybe founder Bang Si-Hyuk,requesting his indictment for allegedly defrauding investors in 2019. The Seoul Metropolitan Police Agency claims Bang misled shareholders about the company's plans to go public to facilitate a private equity transaction .
The $147 million side deal at the heart of the fraud claim
The core of the investigation centers on allegations that Bang Si-Hyuk told investors in 2019 that Hybe had no immediate plans for an initial public offering (IPO). According to the report, this misinformation prompted investors to sell their shares to a private equity fund shortly before Hybe actually proceeded with its IPO. This sequence of events suggests a coordinated effort to shift ownership before the company's valuation spiked upon entering the public market.
Further complicating the matter is a suspected side agreement. as the report notes, police believe the private equity fund may have paid Bang Si-Hyuk approximately US$147 million in a deal that promised him 30 per cent of the profits from stock sales following the IPO. This financial arrangement is criticl to the case because it provides a potential motive, tying the personal wealth of the Hybe chairperson directly to the timing and execution of the share sales.
Why the Seoul Southern District Prosecutors’ Office rejected two arrest attempts
The current referral for indictment follows a period of friction between law enforcement agencies. The Seoul Metropolitan Police Agency previously attempted to secure the arrest of Bang Si-Hyuk twice, once in April and again in May. However, the Seoul Southern District Prosecutors’ Office rejected both requests, citing a lack of sufficient grounds for arrest and a failure by police to meet demands for more thorough investigation.
This procedural tension suggests that the evidence may not yet be viewed as airtight by the prosecution. While the police have now completed their recommendation, the Seoul Southern District Prosecutors’ Office maintains full control over whether to file formal charges, request further evidence, or drop the case entirely. Bang Si-Hyuk's legal team has maintained that they have provided objective evidence to refute the allegations.
Hybe's legal turmoil amid the BTS world tour return
These legal challenges arrive at a pivotal moment for Hybe as its flagship group, BTS, resumes global activities. The group had previously paused their collective schedule to fulfill mandatory South Korean military service, but they have since returned to launch a highly anticipated world tour. The contrast between the group's triumphant return and the corporate scrutiny facing their founder highlights the volatility of the K-pop industry's business side.
The investigation reflects a broader pattern of scrutiny toward the rapid scaling of K-pop agencies into global conglomerates. As Hybe evolved into one of the most dominant forces in the music industry, the business decisions made during its growth phase—specifically those involving capital markets and investor relations—are now being re-examined by South Korean authorities.
Who are the four other individuals referred for indictment?
Bang Si-Hyuk is not the only target of this investigation. the Seoul Metropolitan Police Agency has asked prosecutors to indict four additional people, including high-ranking Hybe executives and officials from the private equity fund involved in the 2019 transactions. The inclusion of these individuals suggests that police believe the alleged fraud was a systemic effort rather than the action of a single executive.
It remains unclear exactly which executives are named in the referral, and the private equity fund has not been publicly identified by name in the source report. Whether these subordinates will be used as leverage to secure more evidence against Bang Si-Hyuk remains a key point of interest for legal observers in Seoul.
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