Bang Si-hyuk's HYBE Faces Crucial Legal Decision

The Seoul Metropolitan Police Agency's Financial Crime Investigation Unit announced on the 21st that it has applied for an arrest warrant for Bang Si-hyuk, chairman of HYBE, on charges of violating the Capital Markets Act (fraudulent unfair trading). Bang is accused of pocketing approximately 190 billion won in illicit profits during HYBE's initial public offering (IPO). This warrant application marks a significant turning point in the investigation related to HYBE's IPO, and the case is now considered to have moved beyond simple allegations to the first stage of judicial review.

Police believe Bang induced the sale of shares by telling existing investors in 2019 that there were no plans for an IPO, and then proceeded with the listing to gain illicit profits. Furthermore, Bang is suspected of receiving 30% of the post-IPO sale profits according to a non-disclosure agreement signed in advance with a private equity fund. Regarding this, he stated, "​It is regrettable that an arrest warrant has been applied for despite my diligent cooperation with the investigation for a long period," and expressed his intention to faithfully participate in legal proceedings to provide his explanation.

Bang entered the music industry in 1994 and worked as a songwriter at JYP Entertainment, creating numerous hit songs. He founded Big Hit Entertainment (now HYBE) in 2005 and debuted BTS in 2013. The team name BTS embodies the will to defend their music and values against social prejudice and oppression. Bang has also consistently participated in social contribution activities.

In addition to BTS, HYBE operates multiple labels including SEVENTEEN, ENHYPEN, LE SSERAFIM, and NewJeans, expanding its business areas into global business expansion, fan platforms, AI audio, and gaming. Bang has been recognized for leading HYBE's multi-home, multi-genre strategy, broadening the scope of K-pop.

However, Bang's alleged violation of the Capital Markets Act poses a risk to HYBE. If judicial risks materialize, investor sentiment could shrink, negatively impacting the music production of K-pop groups and the business plans of overseas subsidiaries. The U.S. Embassy in Seoul reportedly sent a letter to the police requesting cooperation for Bang's travel to the United States, but Bang is currently under a travel ban.