Police raid HYBE headquarters in chairman Bang Si-hyuk stock fraud probe

Police raided K-pop giant HYBE’s headquarters Thursday in a sweeping probe into allegations that founder and chairman Bang Si-hyuk defrauded early investors and pocketed illicit gains worth hundreds of billions of won.

The Seoul Metropolitan Police Agency’s Financial Crime Investigation Division began the search around 9 a.m. at the company’s Yongsan District office in central Seoul acting on a warrant secured July 17. The move follows a formal complaint filed a week earlier by the Securities and Futures Commission, accusing Bang of violating the Capital Markets Act through unfair trading practices.

Bang — who founded Big Hit Entertainment, the predecessor to HYBE, in 2005 — is accused of misleading early investors in late 2019 by claiming the firm had no plans to go public, prompting them to sell their shares. He allegedly proceeded with the company’s initial public offering, earning a profit estimated in the hundreds of billions of won.

Authorities are also investigating claims that Bang orchestrated the sale of investors’ shares to a special purpose company set up by a private equity fund. Two of the three registered executives of the fund at the time were reportedly former HYBE employees and known close associates of Bang.

The police applied for a search warrant on July 17, targeting HYBE’s Yongsan office and other locations. Jurisdiction over the case became contentious after the Financial Supervisory Service’s special investigation team received investigative authority from the Seoul Southern District Prosecutors’ Office on Monday, raising concerns over possible conflicts in the direction of the probe.

BY KIM JI-HYE [kim.juyeon2@joongang.co.kr]