[Alpha Biz= Kim Jisun] Police in South Korea have applied for an arrest warrant for Bang Si-hyuk, chairman of HYBE, on allegations of fraudulent unfair trading that generated illicit gains of approximately KRW 200 billion.

The Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency said on April 21 that it had requested the warrant from the Seoul Southern District Prosecutors’ Office, citing violations of the Capital Markets Act, specifically fraudulent and unfair trading practices.

Bang is accused of orchestrating the establishment of a private equity fund in 2019, ahead of HYBE’s initial public offering (IPO), through associates including former outside directors. The fund allegedly purchased unlisted HYBE shares from investors. Investigators believe Bang misled existing investors by suggesting there were no imminent plans for an IPO, thereby inducing them to sell their holdings to the fund.

 

It is also alleged that Bang had a prior agreement with the private equity fund to receive more than 30% of the capital gains from share disposals following the IPO. The fund reportedly sold a substantial portion of HYBE shares shortly after the listing, and financial authorities estimate that Bang received around KRW 200 billion in profits under the agreement.

Police have previously summoned Bang for questioning five times as a suspect.

In response, Bang’s legal representatives stated, “We regret that an arrest warrant has been sought despite our full and consistent cooperation with the investigation,” adding that they will “faithfully participate in the legal process and do their utmost to present their case.”

Shares of HYBE closed at KRW 249,000 on the day, down KRW 6,000 (2.35%) from the previous session.

 

 

 

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