According to Field News, HYBE - a Kpop entertainment giant led by Chairman Bang Si Hyuk - is facing the most serious crisis since its inception, when it became the target of a special tax investigation from the Seoul Regional Tax Department (Korea).
This development comes in parallel with the police's ongoing investigation into the accusation that Chairman Bang Si Hyuk had deceived current investors to make illegal profits before the company was listed (IPO), showing signs of violating the Capital Market Law.
Specifically, on July 29, the National Tax Administration of Korea announced the launch of a special audit targeting 27 companies and individuals suspected of tax evasion through unfair trading activities, disrupting the stock market, including HYBE.
According to sources in the entertainment industry and relevant agencies, the " down-and-out investigation agency No. 4" - known as the "death of the business world" - under the Seoul Regional Tax Department, sent investigators to HYBE's headquarters in Yongsan, Seoul on Monday morning without prior announcement.
This is the first tax investigation targeting HYBE in 3 years. In June 2022, the company was periodically audited by the No. 1 Investigation Agency under the Seoul Tax Department, resulting in an additional tens of billions of won in taxes.
Meanwhile, HYBE is also under criminal investigation by special judicial police officers under the Financial Supervisory Authority, under the supervision of both prosecutors and police.
The parallel investigation was further intensified after the Securities and Exchange Commission (SEC) filed a complaint with the prosecutor on July 16, accusing Bang Si Hyuk and four former HYBE executives of fraudulent and unfair trading under the Capital Market Law.
Chairman Bang Si Hyuk was accused of deceiving HYBE's current investors in 2019, saying the company had no plans to publicly list public stocks (IPO), causing them to sell their shares to a private investment fund established by Bang Si Hyuk's acquaintance. Meanwhile, HYBE is still speeding up procedures to conduct IPO.
Financial institutions reported that Bang Si Hyuk illegally profited 190 billion won, including 30% of the proceeds from selling shares of private investment funds.
The police initially opened an investigation in December 2023, but the investigation was delayed after two requests for a search warrant were rejected. Recently, the final search warrant was issued after the third time.
On July 24, the Financial Crime Investigation Unit of the Seoul Capital Police Department arrived at HYBE Group headquarters in Yongsan, Seoul to raid the building and conduct a search and seizure of property.
HYBE is one of the 4 largest companies in the Korean music industry (along with SM, YG and JYP), owning many famous music groups such as BTS, Seventeen, TXT, LE SSERAFIM, ILLIT, NewJeans...
