HYBE Chairman Bang Si-hyuk Under Investigation for Alleged Capital Market Law Violation

HYBE Chairman Bang Si-hyuk is under police investigation for alleged violations of capital market laws, drawing attention to the potential legal outcomes.

On the morning of the 15th, Bang appeared at the Seoul Metropolitan Police Agency's Financial Crimes Investigation Unit in Mapo-gu, Seoul, as a suspect. Dressed in a black suit, he briefly addressed the media, saying, "I apologize for causing concern with my personal matters. I will cooperate fully with the investigation." When questioned about the allegations of selling shares before the company's IPO, he stated, "I will address this during the investigation," refraining from further comments.

Bang is accused of misleading investors by stating there were no plans for an IPO before HYBE's 2019 listing, while allegedly facilitating the transfer of shares to a special purpose company (SPC) linked to a private equity fund associated with him. Authorities believe Bang profited approximately 190 billion KRW through this transaction, receiving 30% of the stock sale profits.

The key issue in this case is whether Bang intentionally deceived investors. If the police can prove that his statement about having no IPO plans was false and that he gained direct financial benefits from this, he could face charges of fraudulent trading under capital market laws.

If evidence emerges that HYBE was already preparing for an IPO, Bang's defense could be significantly weakened. Conversely, if Bang argues that the IPO was uncertain at the time and that he did not intentionally withhold information from investors, he might be able to contest the allegations legally.

The police launched the investigation late last year after receiving a tip-off, with the Financial Supervisory Service's special judicial police conducting a separate probe under the prosecution's guidance. A legal expert noted, "Given the scale of the investigation and the amount involved, the decision to prosecute will hinge on proving intent and collusion. Testimonies from victims, internal documents, and records of the IPO preparation process will be crucial evidence."

Bang's legal issues could impact HYBE's operations. As a leading global K-pop company, HYBE is currently managing significant projects, including BTS's activities before military service, nurturing new groups, and expanding into international markets. If Bang, the founder and largest shareholder, faces legal proceedings, it could damage the company's external credibility.

Previously, Bang assured in an internal message that he would "explain and resolve the personal issues diligently to avoid burdening the company," but analysts suggest that prolonged investigations could lead to internal turmoil.

Choi Ji-ye, Ten Asia Reporter wisdomart@tenasia.co.kr