Police raided HYBE’s headquarters in Seoul on July 24th, as part of a widening investigation into Chairman Bang Si Hyuk over alleged investor fraud and illicit gains during the company’s IPO process.
The Seoul Metropolitan Police announced that Bang is accused of misleading shareholders in 2019 by claiming there were “no IPO plans” even as HYBE was preparing to go public. Several institutional investors, including venture capital firms, sold off their shares, believing his statement.
>> Bang Si Hyuk and 3 HYBE Executives to Be Criminally Charged
Investigators say Bang then enabled an associate to buy those shares through a private equity fund (PEF) and later signed an undisclosed agreement to receive 30% of the profits, an arrangement not included in official securities filings.
HYBE was already taking internal steps toward listing at the time, including applying for a designated auditor, fueling suspicions that Bang intentionally concealed the IPO plans. Police estimate his gains from the alleged scheme could total hundreds of billions of Korean won.
On July 16th, the Securities and Futures Commission filed a criminal complaint against Bang and two others for violating unfair trading rules under the Capital Markets Act. The search warrant was approved the next day, leading to the raid at HYBE’s offices.
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