South Korean police are seeking an arrest warrant for Bang Si-hyuk, the billionaire founder of Hybe Corporation and mastermind behind K-pop sensation BTS. The charges involve alleged fraudulent trading activities prior to Hybe's $7.3 billion initial public offering.
Authorities accuse Bang of misleading investors in 2019 by downplaying the likelihood of a public listing for his company, while secretly preparing for it. Police allege this deception allowed Bang to pocket approximately 200 billion won ($136 million) upon Hybe's Kospi bourse debut in October 2020. Bang vehemently denies the allegations.
The long-running investigation has already led to raids on Hybe's headquarters and the freezing of some of Bang's assets. The 53-year-old has been barred from international travel since August as the probe continues.
The warrant request comes as BTS, Hybe's most valuable asset, has launched a highly anticipated world tour. Industry experts estimate this sold-out tour could generate over $1 billion for Hybe, with the company's shares having reached a four-year high following the tour's announcement.
Bang, who was instrumental in BTS's global ascent, faces potential penalties under South Korean law, including jail time ranging from five years to life imprisonment for illicit gains of 5 billion won or more.
Hybe, formerly Big Hit Entertainment, was co-founded by Bang in 2005. He was previously a co-founder of JYP Entertainment, one of the other major K-pop conglomerates, where he gained the nickname "Hitman Bang" for his success in discovering and producing groups like g.o.d.
The investigation centers on allegations that Bang engaged in profit-sharing agreements with private equity funds before Hybe's market debut without proper disclosure. Police suspect Bang deceived investors into selling shares to a private equity fund with which he allegedly had ties, subsequently profiting when the fund divested after the IPO.
Hybe has maintained that the necessary disclosures were made to its IPO underwriters. Bang's legal team expressed regret over the warrant request, stating they will cooperate fully with legal proceedings to present their case.