Bang Si Hyuk, the founder and current chairman of HYBE, is now facing serious legal trouble related to how his company went public. On July 9, South Korea’s financial authorities revealed that the Capital Market Investigation Deliberation Committee (CMIDC), which reviews financial misconduct cases, had reviewed Bang’s case and decided it should move forward. The matter is now in the hands of the Securities and Futures Commission (SFC), which is expected to make a final decision at its upcoming meeting on July 16. If they agree with the recommendation, Bang could be formally charged with breaking capital market laws, specifically involving fraud and unfair trading.
In response to the growing controversy, HYBE released a public statement. The company said it regrets the attention this issue has brought, especially as it relates to its stock market debut. It acknowledged the public’s concerns and confirmed that it is fully cooperating with both financial regulators and the police by supplying detailed explanations and documents. While HYBE maintains that it followed all legal rules during the IPO, it admitted that resolving the matter might take time.
The roots of this investigation go back to 2020, before HYBE—then known as Big Hit Entertainment—officially went public. Reports claim that Bang Si Hyuk made confidential deals with private equity firms, including Stick Investment, Eastone Equity Partners, and Newmain Equity. These agreements allegedly included a profit-sharing clause: if HYBE successfully launched its IPO within a certain timeframe, Bang would receive 30% of the profits. If the IPO failed, he would buy back the shares at the original price, effectively removing any risk for the investors involved.
HYBE did go public during the agreed period, and Bang reportedly earned over 400 billion KRW from the process. However, these private deals were never disclosed during the IPO. That lack of transparency is at the heart of the current controversy. Some experts believe that this information, had it been made public, could have influenced early investor decisions and potentially affected share pricing. Critics say that withholding these details created an uneven playing field for ordinary investors.
Interestingly, HYBE and its IPO underwriters were reportedly aware of these behind-the-scenes agreements, but they relied on legal opinions at the time which suggested that the arrangements didn’t need to be disclosed. Now, regulators are questioning that judgment.
Despite the seriousness of the allegations, attempts to obtain search warrants for HYBE have already been denied twice. Still, public pressure has been rising, especially from early investors who feel misled and financially harmed by the lack of transparency. This has fueled parallel investigations from both financial watchdogs and police authorities, putting even more pressure on HYBE and its leadership. The outcome of the SFC’s decision will likely have a lasting impact—not just on Bang Si Hyuk’s future, but also on how IPOs are handled in South Korea moving forward.
