The Financial Crime Investigation Team of the Seoul Police's Multi-regional Investigation Unit said on September 3 that it had transferred files of 5 people, including HYBE Chairman Bang Si Hyuk, members of the HYBE Corporation leadership and people related to private investment funds, on charges of fraudulent transactions under the Capital Market Act.
Currently, the files of the 5 people have been transferred to the Prosecutor's Office in a state of no detention.
Regarding Kim Jung Dong, former Chief Investment Officer (CIO) of HYBE, who is abroad, the police requested an arrest warrant, issued an arrest warrant domestically and requested Interpol to issue a red notice, then temporarily suspended the investigation.
Bang Si Hyuk and related people are accused that in 2019, while promoting HYBE's listing plan, they deceived existing shareholders that the company had no plans to list, thereby causing shareholders to sell their holdings to a special-purpose company (SPC) belonging to a private investment fund (PEF) invested by former HYBE leaders.
The financial regulator said that after HYBE conducted listing, Bang Si Hyuk profited from the difference in share selling price under an unpublicly signed agreement with PEF. The amount of illegal profits of Bang Si Hyuk and related people is said to be up to 263.1 billion won.
South Korea's Capital Markets Law prohibits acts such as using lies to profit from assets or using fraudulent plans related to financial investment products, including unlisted stocks. Violators who make profits of 5 billion won or more may be sentenced to life imprisonment or at least 5 years in prison.
Police determined that this was an organized financial and securities case, planned, with the participation of experts in many fields of the capital market, and also an act of disrupting the order of the capital market.
After grasping the case related to Bang Si Hyuk in December 2024, the police conducted a preliminary investigation. By July last year, police searched HYBE headquarters, and from September to November of the same year, they summoned Bang Si Hyuk 5 times as a suspect for questioning.
Then, in April and May this year, police twice requested an arrest warrant for Bang Si Hyuk, but both were returned by the prosecutor with requests for additional investigation, causing the investigation to drag on.
HYBE is Korea's leading entertainment group, owning an ecosystem of many subsidiaries such as BigHit Music (managing BTS, TXT), PLEDIS Entertainment (SEVENTEEN, TWS), Ador (NewJeans), Source Music (LE SSERAFIM), Belift Lab (ENHYPEN, ILLIT), KOZ Entertainment (BOYNEXTDOOR, ZICO)...
