HYBE Chairman Bang Si-hyuk Referred to Prosecutors Over $192M IPO Case

Bang Si-hyuk, chairman of HYBE, has been referred to prosecutors over allegations that he misled existing investors ahead of the company's 2020 stock market debut. Police believe Bang and the other suspects obtained a combined 263.1 billion won (about $192 million) in illicit gains through the transactions.

The financial crimes investigation team under the Seoul Metropolitan Police Agency's Metropolitan Investigation Unit said on Sept. 3 that it referred Bang to the Seoul Southern District Prosecutors' Office without detention on suspicion of fraudulent unfair trading under the Financial Investment Services and Capital Markets Act. The referral came after a roughly 20-month investigation that began with a preliminary inquiry in December 2024.

Also referred without detention were HYBE CEO Lee Jae-sang, former Chief Financial Officer Kwon Yong-sang, Easton Equity Partners CEO Yang Jun-seok and NewMain Equity CEO Kim Chang-hee.

Police suspended their investigation into former HYBE Chief Investment Officer Kim Jung-dong, who is currently overseas. An arrest warrant has been issued for Kim, and police have placed him on a domestic wanted list and requested an Interpol Red Notice.

According to police, Bang and the other suspects prepared for HYBE's initial public offering in 2019 while telling existing shareholders that the company had no plans to go public. They allegedly encouraged the shareholders to sell their stakes to a special purpose company established by private equity firms linked to Bang.

The company, then known as Big Hit Entertainment, listed on the Korea Exchange's main board in October 2020 and later changed its name to HYBE. The private equity funds subsequently sold their shares, and police concluded that the suspects obtained a combined 263.1 billion won in illicit gains through the transactions.

A court granted a police request for a pre-indictment asset preservation order covering the entire amount.

During the investigation, police twice sought arrest warrants for Bang. Prosecutors rejected both applications, saying the grounds for detention had not been sufficiently established and that further investigation was necessary. Police ultimately referred Bang without detention.

Bang's legal team said on the same day that it had "consistently addressed the issues raised based on objective materials and evidence."

"We expect the allegations to be transparently resolved through the procedures ahead," the legal team added.

The Seoul Southern District Prosecutors' Office is expected to conduct a further investigation before deciding whether to indict. The allegations are also being examined separately by special judicial police officers from the Financial Supervisory Service under the prosecution's direction.