HYBE’s Bang Si Hyuk Facing Potential Prosecution Over Alleged Illegal Activities Following Investigation

HYBE chairman Bang Si Hyuk may soon face prosecution after South Korea’s Financial Supervisory Service concluded its investigation into allegations of fraudulent activity during HYBE’s stock listing process.

According to reports from the financial investment sector, the FSS has decided to refer Bang to the Securities and Futures Commission for violating the Capital Markets Act. The referral will include recommendations that he be indicted for his alleged involvement in fraudulent transactions tied to HYBE’s initial public offering (IPO).

The FSS had initially considered using an emergency “fast-track” process to send the case directly to prosecutors. However, officials ultimately chose to complete further investigation and gather enough evidence before initiating formal procedures. With the FSS currently lacking a governor, the decision to go through the Securities and Futures Commission was reportedly seen as more appropriate from a legal and procedural standpoint.

The investigation reached its final stages late last month, when Bang was summoned for questioning. No further questioning is expected, as the FSS reportedly heard his final statement. During the investigation, evidence was collected suggesting that Bang and HYBE misled investors by saying there were no IPO plans, despite internally moving ahead with listing procedures.

Bang is accused of persuading existing investors to sell their shares in 2019 under the false claim that HYBE had no plans to go public. Those shares were then allegedly acquired by a private equity fund (PEF) created by an associate of Bang. Internally, however, the company was preparing for its IPO, including applying for a designated auditor and selecting underwriters.

Reports also claim that Bang entered into a profit-sharing agreement with the PEF, receiving an estimated ₩400 billion KRW (about $294 million USD) after HYBE went public. This agreement was not disclosed in the company’s official filings.

Meanwhile, the police are continuing a separate investigation, having recently secured related documents through a search of the Korea Exchange’s offices.