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Police seek arrest warrant for K-pop executive Bang Si-hyuk
South Korean authorities have requested prosecutors to obtain a court warrant for the arrest of Bang Si-hyuk, the founder of entertainment giant Hybe, on charges of fraudulent trading linked to the company's 2020 public listing. Police allege Bang misled investors in 2019 by downplaying plans for an IPO while secretly preparing for it, netting approximately $136 million (200 billion won) in the process.
Allegations and denials
Bang, 53, stands accused of deceiving existing investors and venture capital firms into selling their Hybe shares to a private equity fund with alleged ties to him. Police claim he assured stakeholders that a public listing was unlikely, only to secure a 30% share of profits when the fund later sold its stake post-IPO. The alleged fraudulent proceeds total 200 billion won.
Hybe has consistently denied wrongdoing, stating that the agreement in question was reviewed by underwriters who deemed disclosure unnecessary. Bang's legal team echoed this stance in a Tuesday statement, expressing regret over the warrant request but vowing to cooperate with investigations and clarify their position.
Legal and financial fallout
Bang has been barred from international travel since August as the probe continues. Under South Korean law, convictions for illicit gains exceeding 5 billion won carry penalties ranging from five years in prison to life imprisonment. The case has already seen raids at Hybe's headquarters and the freezing of some of Bang's assets.
Hybe's shares dropped 2.3% on Tuesday, contrasting with a 2.7% rise in the benchmark Kospi index. Shares of rival K-pop conglomerates also declined amid broader concerns over regulatory scrutiny in the sector.
BTS comeback and Hybe's financial stakes
The warrant request coincides with BTS's highly anticipated world tour, which began weeks ago after a nearly four-year hiatus. Analysts project Hybe could earn over $1 billion from the sold-out tour, spanning 34 cities. The announcement of the tour in January sent Hybe's stock to a four-year high, adding over 1 trillion won to its market value.
"BTS has become like a tourist attraction, widely recognized and embraced by the global public," Bang told Billboard in a recent interview.
Background and career
Bang's career in music began in middle school as a band member and songwriter. He co-founded JYP Entertainment in 1997, earning the nickname "Hitman Bang" for his work with early K-pop group g.o.d. In 2005, he left JYP to establish Big Hit Entertainment-now Hybe-and later created BTS, which debuted in 2013 after pivoting from a hip-hop concept to a K-pop idol model.
BTS's global success, including topping the Billboard Hot 100 and surpassing 5 billion Spotify streams, propelled Hybe's 2020 IPO. Shares debuted at $235, more than double the initial offering price of $110. Bang's net worth surged from $770 million in 2019 to over $2 billion, with his 13 million Hybe shares valued at nearly 5 trillion won as of last month.
Broader crackdown on stock manipulation
The case reflects South Korea's intensified efforts to combat illicit trading. President Lee Jae Myung has pushed for stricter penalties, including fines of up to twice the value of illicit gains and immediate account suspensions under a "one strike" policy. A dedicated task force, comprising financial regulators and stock exchange officials, was formed in August to investigate such activities.
High-profile figures like Samsung's Lee Jae-yong and Kakao's Kim Beom-su have faced similar charges in the past, though many were ultimately acquitted.
