"HYBE's Bang Si-hyuk Referred to Prosecution After 1 Year and 8 Months of Police Investigation Over Hundreds of Billions in Listing Profits"

Concealed HYBE's Listing Plans and Induced Shareholders to Sell

Realized Profits by Selling Private Equity Fund Shares After Listing

Bang Si-hyuk, chairman of HYBE, has been referred to the prosecution on charges of concealing the company’s listing plans and making profits by acquiring shares through a private equity fund.

Bang Si-hyuk, Chairman of HYBE, is appearing at the Seoul Metropolitan Police Agency Mapo General Office in Mapo-gu, Seoul, last September. Photo by Dongju Yoon

On September 3, the Financial Crime Investigation Division of the Seoul Metropolitan Police Agency announced that it had forwarded Bang and four others—including HYBE executives and private equity fund officials—to the prosecution without detention on charges of fraudulent unfair trading under the Capital Markets Act. This comes 1 year and 8 months after an investigation began in December 2024.

According to police, while preparing HYBE’s listing, Bang and others are suspected of instructing then-existing shareholders in 2019 that there were no plans for listing, even though they were aware that the company’s value could rise post-listing. This led existing shareholders to sell their shares to the private equity fund, and after HYBE went public in 2020, they are alleged to have earned a profit of 263.1 billion won.

Eastone PE, the private equity fund in question, acquired an 8.7% stake in HYBE for 104.6 billion won in November 2019. Immediately after HYBE was listed in October 2020, the fund sold a portion of its shares for 301.1 billion won over seven trading days and disposed of the remainder for 327.3 billion won between May and June 2021. The total proceeds from these sales amounted to 628.5 billion won.

The police believe that the profits obtained were shared between HYBE executives and the private equity fund representatives, viewing the matter as an organized and premeditated financial crime involving experts from each sector of the capital markets. Under the common objective of gaining profits from the company’s listing, they concealed listing-related information from existing shareholders and acquired their stakes, thereby undermining fairness and trust in the capital market.

The police assessed that Bang and others obtained unjust profits of 263.1 billion won through this scheme and have taken measures for provisional attachment before indictment. This amount was calculated by subtracting the distributed sum to investors, acquisition financing costs, and relevant transaction taxes and fees from the difference between the total sale price and purchase price of 523.9 billion won.

Previously, in April and May, the police requested arrest warrants for Bang twice, but the prosecution either returned the requests for supplementary investigation or declined to seek the warrants. After additional investigation and legal review, the police decided not to seek another arrest warrant, judging that there was no new reason that would alter the existing findings.

A police official stated, “We will cooperate closely with the prosecution to ensure that those responsible receive stern punishment commensurate with their crimes,” and added, “We will strive to establish a fair capital market order where the public can invest with confidence.”

This content was produced with the assistance of AI translation services.