BANG SI HYUK
BANG SI HYUK, chairman of HYBE, under investigation for “fraudulent transactions”: tensions escalate with a new search warrant request.
As BANG SI HYUK, chairman of HYBE, faces a police investigation on suspicion of “fraudulent transactions” under financial market laws, a new search warrant targeting HYBE’s headquarters has been filed, fueling growing controversy.
On May 28, the Financial Crimes Investigation Unit of the Seoul Metropolitan Police’s Special Investigation Division submitted a second request for a search warrant to the Financial Affairs Office of the Seoul Southern District Prosecutor’s Office. This marks the second warrant request related to these allegations. The first request, filed earlier this month, was rejected by the prosecutors. After strengthening their investigation, the police have filed the warrant request again.
The core issue centers on suspicions that in 2019, BANG SI HYUK told investors there were no plans for an IPO (initial public offering), even though HYBE was actively preparing to go public, including signing a designated audit contract. Meanwhile, official responses were sent to investors explaining that market conditions made an IPO difficult. Some investors, convinced by these explanations, sold their shares to a private investment fund.
However, this fund is alleged to have been established by an associate of BANG SI HYUK, who reportedly made a secret agreement with the fund to share 30% of the profits from the resale of shares after the IPO, earning him approximately 400 billion won (around 270 million euros). This agreement was never disclosed in the official IPO documents.
Authorities view this arrangement as a typical case of fraudulent trading, where investors are deceived into selling shares at a low price, which are then resold at a higher price after the IPO. If convicted under the financial markets law, BANG SI HYUK could face life imprisonment or a fine up to three times the illicit gain, approximately 1.2 trillion won (about 750 million dollars).
Separately, a HYBE employee identified as Mr. A is also under investigation by the Seoul Southern District Prosecutor’s Office for insider trading, having purchased YG Plus shares using non-public information and profited illegally by about 240 million won (roughly 150,000 dollars). HYBE’s headquarters was recently searched in connection with this case.
HYBE’s stock price has fallen for four consecutive trading days amid these revelations. As of May 30, the stock closed at 266,000 won, down roughly 8% over four days. Some analysts see this as a buying opportunity due to the “Bang Si-hyuk risk,” but the medium- and long-term impact will largely depend on the investigation’s outcome.
Journalist: Shawn
Translator: Shawn
Source: SNS HYBE, Korean Medias
