Seoul police have petitioned the court for an arrest warrant against Bang Si-hyuk, founder and chairman of the major music label HYBE, on charges of violating capital market laws and engaging in unfair stock trading practices, allegedly earning illicit profits approaching 200 billion won. Bang maintains he acted in accordance with the law.
The Seoul Metropolitan Police Agency revealed on Tuesday that it has filed a request for an arrest warrant for Bang Si-hyuk, chairman and founder of HYBE, the major music label behind BTS's global success, on charges of violating capital market regulations and engaging in unfair stock trading.
Investigations indicate that Bang is accused of deceiving investors in 2019 by persuading existing shareholders to sell their shares before the company's initial public offering (IPO). He allegedly used schemes to transfer those shares to a private fund linked to close associates. After the company went public, that fund sold the shares and shared 30% of the profits with Bang under a secret agreement, resulting in nearly 200 billion won (approximately 4.36 billion baht) in illegal gains.
Under South Korean capital market law, anyone who gains profits through fraud or false investment information exceeding 5 billion won faces penalties including life imprisonment or a minimum of five years in prison.
In response to the recent developments and allegations, representatives for Bang Si-hyuk have denied all accusations, affirming that the IPO process fully complied with legal and regulatory requirements. Meanwhile, HYBE has yet to issue an official statement on the matter.
Since August last year, Bang has been banned from leaving South Korea pending investigations. However, reports indicate that the U.S. Embassy in Seoul sent a letter to the police requesting a temporary lift on the travel ban to allow Bang to travel to the United States to participate in U.S. Independence Day celebrations and oversee BTS's ongoing global concert tour.
Following the news, HYBE's stock price immediately fell by 2.9% this morning, contrasting with the upward movement of South Korea's KOSPI index, reflecting investor concerns about the future of the major music label.