Hybe Bang Si-hyuk promises to face investigation

Photo Credit: Hybe

Hybe founder and chair Bang Si-hyuk vows to return to Seoul to face the music with investigations into allegations tied to Hybe’s 2020 IPO.

Bang Si-hyuk, founder and chair of K-pop juggernaut Hybe, has vowed to return to Seoul and fully cooperate with authorities investigating him for alleged fraudulent activity related to the company’s initial public offering (IPO) in October 2020. In an internal email sent to Hybe employees on Wednesday, Bang addressed concerns mounting over the allegations, releasing his first public statement on the matter.

“While I’ve instead focused on supporting BTS and other Hybe artists and advancing key business opportunities overseas, my continued time abroad has been prolonged,” said Bang. “By returning to Korea, it will be easier for me to fully cooperate with the authorities to address these allegations and alleviate any stress or anxiety these events have caused our community.”

“As founder and chairman, I feel a deep sense of responsibility to do everything in my power to ensure nothing takes away from the hard-earned attention and praise your work continues to receive,” Bang said to Hybe employees.

It isn’t yet clear when Bang will return to Korea or when he will be formally questioned by investigators. South Korean financial regulators and prosecutors have been investigating allegations that in 2019, Bang misled Hybe’s early investors by denying plans for a public listing. Despite this denial, Bang allegedly arranged the sale of shares to a company tied to a private equity fund with which he had connections.

According to authorities, this may have constituted “fraudulent, unfair trading” under Korea’s Capital Markets Act. Someone who gains or avoids losses of over 5 billion won through unfair trading could face five years to life in prison. Allegedly, Bang received 30% of the fund’s resale profit following the IPO, and pocketed around 190 billion won for it.

The Financial Services Commission filed a criminal complaint on July 16, and the Financial Supervisory Service has conducted a separate inquiry under the Seoul Southern District Prosecutors’ Office. Police raided Hybe’s headquarters in Seoul a week later, as part of an ongoing probe. On July 29, the National Tax Service also launched an audit.