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Financial watchdog to refer HYBE CEO to prosecution on fraud allegations

Published: 28 May. 2025, 21:26

YOON SO-YEON
[email protected]

Bang Si-hyuk, founder and chairman of HYBE, at a conference held in Seoul on Feb. 20 [NEWS1]

The financial watchdog will report Bang Si-hyuk, founder and chairman of K-pop powerhouse HYBE, for lying to shareholders so that they would sell their shares to a private fund run by Bang's acquaintance, a report said Wednesday.

According to a report by The Korea Economic Daily, the Financial Supervisory Service (FSS) has gathered evidence that Bang lied to HYBE shareholders in 2019 before the company went public on the Korea Exchange.

He allegedly told shareholders that he had no intention of taking the company public and provided them with false information to persuade them to sell their shares to a private equity fund (PEF) founded by one of his acquaintances.

Bang was even promised 30 percent of the investment profit from the PEF, which paid him 400 billion won ($291 million), according to the report.

If found true, Bang's actions would constitute fraudulent activity under the Financial Investment Services and Capital Markets Act.

The FSS has gathered “multiple documents” that Bang and HYBE proceeded with plans to take the company public while simultaneously assuring early investors that there were no such plans, according to the report.

Bang Si-hyuk, chairman of K-pop powerhouse HYBE, talk with other attendants at the 64th general meeting of The Federation of Korean Industries (FKI) at the FKI Tower conference center in western Seoul on Feb. 20. [YONHAP]

The FSS is closely scrutinizing activity from late 2019. Existing shareholders had sent an email urging Bang and HYBE to take the company public, to which the company replied in September and October 2019 that it was “impossible under current circumstances.”

HYBE signed with Ernst & Young as the underwriter in November 2019. The company listed on the Korea Exchange stock market in October 2020.

“All transactions took place within the boundaries of law, after they were overseen by legal experts,” HYBE said.

The FSS plans to fast-track the case to prosecutors once its investigation concludes, according to the report.

Article 443 of the Capital Markets Act stipulates that a fraudulent financial act that has resulted in more than 5 billion won in profit can lead to a prison sentence of five years to life.

BY YOON SO-YEON [[email protected]]