Investigation Into HYBE Bang Si Hyuk’s Alleged Illegal Actions Gets A Major Breakthrough

The investigation into Bang Si Hyuk, founder and chairman of HYBE, has reached a turning point as South Korea’s Financial Supervisory Service (FSS) prepares to formally request a criminal probe. Authorities are focusing on suspicions that Bang was involved in fraudulent transactions related to HYBE’s IPO (initial public offering) process.

According to industry sources, the FSS has gathered evidence suggesting that in 2019, Bang misled early investors by claiming HYBE had no plans to go public. This allegedly caused them to sell their shares to a private equity fund (PEF) founded by one of Bang’s close associates. Despite these claims, HYBE had already started IPO procedures, including applying for a designated auditor, a necessary step to take before listing.

What’s particularly concerning is that Bang had a profit-sharing agreement with the PEF. Under this deal, he was entitled to receive about 30% of the investment profits, which reportedly netted him around ₩400 billion KRW (about $291 million USD). However, this contract was not disclosed in the IPO filings, raising red flags about transparency and fairness.

The FSS treated this as a case of “fraudulent unfair trading” under Korea’s Capital Markets Act. The agency plans to hand over the case to prosecutors through a fast-track process. Meanwhile, the Seoul Metropolitan Police Agency’s Financial Crimes Division also conducts a separate investigation.

HYBE responded to the controversy at the time by stating that all transactions were conducted legally after thorough legal reviews.

The new update comes six months after the initial reports of suspicious deals involving HYBE and the private equity firms. The FSS initially began reviewing potential disclosure violations but has shifted its focus to more serious fraud allegations.

If these allegations are confirmed, Bang and others involved could face severe legal consequences. Under the law, fraudulent profits exceeding ₩5.00 billion KRW (about $3.63 million USD) can lead to life imprisonment or at least five years in prison.

Authorities are now under pressure to set a strong precedent, as concerns grow that similar behind-the-scenes deals in IPOs could erode trust in Korea’s financial markets.