HYBE founder and chairman Bang Si-hyuk is facing potential arrest after South Korean police requested a detention warrant over allegations that he orchestrated a fraudulent pre-IPO trading scheme that generated about 190 billion won (around 129 million dollars) in illicit profits tied to the K-pop agency’s blockbuster stock market debut.
South Korea’s financial crimes unit at the Seoul Metropolitan Police Agency has asked a court to issue a detention warrant for Bang on suspicion of violating the Capital Markets Act, putting his leadership of HYBE under intense scrutiny.
Investigators allege that, ahead of HYBE’s 2020 initial public offering, he engaged in fraudulent and unfair trading designed to secure tens of millions of dollars in unlawful gains. A judge is expected to review the request and decide whether to grant the warrant, a decision that could lead to his arrest and pretrial detention, according to the BBC.
Bang Si-hyuk’s Potential Arrest
Authorities say the alleged scheme began in 2019, when Bang is accused of misleading early HYBE investors by saying the company had no plans to go public. On the basis of those assurances, some shareholders reportedly sold their stakes to a private equity fund or a special-purpose company linked to Bang and his associates.
At the same time, HYBE was said to be taking key steps toward an IPO, including moves such as appointing an external auditor, which investigators argue made the “no listing” claim deceptive.
After HYBE listed on the stock market in 2020, the fund is alleged to have sold the shares at far higher prices, generating profits estimated at about 190 billion won, or 129 million dollars, with Bang reportedly receiving around 30 percent of the gains, Tribune reported.
South Korea’s financial watchdog had already referred Bang to prosecutors over similar allegations of fraudulent stock trading tied to the IPO, one of the most serious measures it can take.
The referral followed a lengthy capital markets probe and multiple summonses as authorities examined whether insiders used the structure to sidestep post-IPO lock-up rules meant to restrict early share sales.
Bang has denied any wrongdoing, arguing through his lawyers that the profits reflected legitimate investment risk and that other investors also benefited from the deals.
HYBE, citing his legal team, has said it regrets the move to seek a detention warrant, emphasized that Bang has cooperated with investigators, and pledged to follow legal procedures as the case moves forward, as per NBC News.
The probe has drawn global attention because HYBE manages BTS and other major K-pop acts, leaving fans and investors watching closely to see whether the court approves the warrant and how any arrest might affect the company’s leadership and stock performance.