SEOUL - April 21
South Korean investigators have moved to escalate their legal case against Bang Si-hyuk, the founder and chairman of music company HYBE, by requesting a detention warrant tied to accusations of illicit trading around the firm’s stock market debut. The Seoul Metropolitan Police Agency has presented allegations that Bang contravened capital market laws by providing misleading guidance to early investors before HYBE listed, and by facilitating the sale of those investors’ shares to a private equity fund linked to his associates.
Police say that after HYBE’s listing the private equity fund disposed of its stake and that Bang received about 30% of the profit from that transaction pursuant to an earlier shareholder agreement. Investigators estimate Bang’s share of the proceeds from that arrangement at roughly 190 billion won, which they describe as illicit gains. Bang has denied any improper conduct.
HYBE issued a statement, relaying comments from Bang’s legal counsel, expressing regret that authorities sought a detention warrant despite what the company described as thorough and ongoing cooperation with the inquiry. The statement said HYBE and Bang will continue to participate in legal procedures and work to set out their position clearly to investigators and the public.
Bang, who founded the company responsible for the global Kpop act BTS, has been subject to a travel restriction since August of last year that bars him from leaving South Korea. The National Police Agency confirmed it recently received a letter from the U.S. embassy in Seoul requesting that authorities allow Bang to travel to the United States temporarily despite the travel ban. According to police, the embassy’s letter asked for a temporary suspension of the ban so Bang and other senior executives could attend an event to mark U.S. Independence Day and hold meetings related to the BTS global tour. The U.S. embassy in Seoul said it had nothing further to add on that matter.
HYBE’s shares retreated after the report of the detention-warrant request; the stock closed down 2.4% following the news, while South Korea’s benchmark KOSPI rose 2.7% on the session. The welfare of HYBE’s share price is directly implicated by the unfolding legal developments and any escalation of enforcement actions.
The formal warrant request will be reviewed by the Seoul Southern District Prosecutors’ Office. Local reporting indicates that if prosecutors decide to pursue a detention warrant, a court commonly schedules a hearing within two to three days to rule on whether to order an arrest. The investigation, the warrant request and any subsequent court proceedings will determine next steps in the case. ($1 = 1471.9 won)
Summary of developments
- Police requested a detention warrant for HYBE chairman Bang Si-hyuk over alleged illegal trading tied to the company’s IPO.
- Authorities allege Bang misled early investors and directed them to sell to a private equity fund linked to his associates.
- Police say Bang received about 30% of profits from the fund’s later sale of its stake - roughly 190 billion won; Bang denies wrongdoing and HYBE says it has cooperated with investigators.
Key context and next steps
- The Seoul Southern District Prosecutors’ Office will review the warrant request; a court hearing to decide on an arrest warrant is typically held within two to three days if prosecutors pursue it.
- Bang has been under a travel ban since August; the U.S. embassy in Seoul requested a temporary lift for planned U.S. engagements tied to Independence Day and BTS tour discussions.