Arrest Warrant for HYBE Chairman Bang Si-hyuk on Investor Fraud Charges Rejected
The arrest warrant for Bang Si-hyuk, Chairman of HYBE, who is suspected of defrauding investors and gaining illegal profits worth approximately 190 billion KRW (about $137 million USD), has been rejected by the prosecution.
On the 24th, the Seoul Southern District Prosecutors’ Office’s Joint Financial and Securities Crime Investigation Team returned the arrest warrant for Chairman Bang, who faces charges of fraudulent unfair trading under the Capital Markets Act, to the police and requested further investigation.
The reason for the rejection was cited as insufficient justification for the necessity of arrest. The prosecution explained, “We determined that the justification for the reasons requiring arrest at this stage was insufficient and requested supplementary investigation.” Previously, the Seoul Metropolitan Police Agency’s Financial Crime Investigation Unit had applied for the arrest warrant for Chairman Bang on the 21st.
Chairman Bang Si-hyuk is accused of deceiving existing investors in 2019, prior to HYBE’s initial public offering (IPO), by stating there were no plans for a public listing. He then allegedly orchestrated the sale of their shares to a Special Purpose Company (SPC) established by a Private Equity Fund (PEF) created by HYBE executives.
Police suspect that Chairman Bang received 30% of the sale profits after HYBE’s listing, based on a confidential pre-arranged agreement with the private equity fund, thereby securing illegal gains estimated at around 190 billion KRW.
The police have been conducting this extensive investigation for approximately 1 year and 5 months, summoning and questioning Chairman Bang five times between September and November last year. In June of last year, authorities raided the Korea Exchange to secure documents related to the listing review, and in July, they conducted a search and seizure at HYBE’s headquarters in Yongsan-gu, Seoul.
HYBE has vehemently denied all allegations, asserting, “At the time in question, an IPO was not the top priority option, and the decision to list was not yet finalized.”
Adding to the ongoing controversy, the U.S. Embassy in Korea recently sent a letter to the National Police Agency, requesting cooperation for Chairman Bang’s visit to the United States. The letter reportedly cited the necessity of his attendance at the U.S. 250th Independence Day celebration and support for global K-pop sensation BTS’s U.S. tour. Chairman Bang has been under a travel ban since October last year.
