There’s been a major turn in the financial investigation involving HYBE founder and chairman Bang Si Hyuk, as South Korean prosecutors have once again denied a police request to search the company’s headquarters. This marks the second rejection, raising questions about the strength of the evidence police have gathered so far. The request was tied to an escalating probe into possible securities fraud tied to HYBE’s pre-IPO transactions.
The Seoul Southern District Prosecutors’ Office gave no official reason for the latest refusal. This follows an earlier rejection in April, even after investigators submitted additional testimony and financial documentation in their revised application. Despite this, police remain undeterred and are reportedly preparing a third, more detailed warrant request in hopes of gaining access to HYBE’s offices for potential physical evidence.
At the heart of the investigation is a 400 billion KRW (approx. 293 million USD) transaction that occurred in 2019—just a year before HYBE’s public debut on the stock exchange. According to findings by the Financial Supervisory Service (FSS), Bang Si Hyuk allegedly orchestrated a private share sale involving early HYBE shareholders and a private equity firm linked to his acquaintance. What he is accused of concealing is a 30% commission he received from the deal—profits that did not appear in HYBE’s financial disclosures prior to the IPO.
The controversy deepens with claims that Bang misled shareholders. Several individuals allege that he explicitly downplayed any plans for taking HYBE public when convincing them to sell their stakes. However, documents obtained by the FSS reportedly contradict these statements, showing that HYBE was already in the process of preparing for its IPO at the time—securing audits, legal reviews, and related filings.
These revelations have triggered accusations of insider manipulation and market deception. If prosecutors conclude that Bang deliberately withheld crucial financial information and misled investors, he could face charges under South Korea’s Capital Market Act. Violating this law—particularly in cases of large-scale financial fraud—can result in serious penalties, including substantial fines or even life imprisonment.
As the investigation continues to unfold, both investors and the public await further developments that could have long-term implications for HYBE’s leadership and the broader entertainment industry.
