HYBE Chair Bang Si-hyuk Referred to Prosecutors Over Alleged IPO Fraud

South Korean police have referred HYBE founder and chair Bang Si-hyuk to prosecutors over allegations that shareholders were misled into selling their stakes before the company went public.

The Seoul Metropolitan Police Agency referred Bang to the Seoul Southern District Prosecutors’ Office on September 3 on suspicion of fraudulent trading under South Korea’s Capital Market Act. Four other people were referred on the same charge.

Police allege that existing shareholders were told in 2019 that HYBE, then operating as Big Hit Entertainment, had no plans for an initial public offering and were encouraged to sell their shares to a private equity fund. Investigators say preparations for an IPO were already underway at the time.

HYBE ultimately went public in October 2020.

Police allege that Bang and others obtained ₩263.1 billion in illicit profits through the arrangement. A court has approved a pre-indictment preservation order covering that amount, according to police.

The referral comes approximately 21 months after police began investigating the allegations. Authorities previously sought an arrest warrant for Bang twice, but prosecutors rejected the requests, citing insufficient grounds for detention and requests for further investigation.

Bang was referred without detention.

Bang and HYBE have denied wrongdoing. In a statement reported by The Associated Press, Bang’s legal team said it has responded to the allegations with evidence and expects the matter to be resolved through the legal process.

The referral does not amount to an indictment. Prosecutors will now review the case and can decide how to proceed, including whether further investigation is necessary.