On September 3, the Financial Crime Investigation Unit of the Seoul Metropolitan Police Agency announced that it had referred five people, including Bang Si Hyuk, HYBE executives, and private equity fund officials, to the Seoul Southern District Prosecutors’ Office without detention on suspicion of violating the Capital Markets Act through fraudulent and unfair trading. The referral came approximately 21 months after police began their preliminary investigation.
According to police, Bang Si Hyuk and others allegedly told existing investors in 2019, when the company was still known as Big Hit Entertainment, that there were no plans for an IPO and subsequently encouraged them to sell their shares to a specific private equity fund. Police believe the individuals later sold those shares after the company went public and obtained approximately 263.1 billion won in illicit gains. Authorities have also secured a court order to preserve the full amount of the alleged illicit proceeds for potential confiscation before indictment.
Meanwhile, an Interpol Red Notice has been issued for Kim Jung Dong, the former Chief Investment Officer of HYBE, who reportedly left the country and went into hiding during the investigation.
Police previously requested arrest warrants for Bang Si Hyuk in April and May, but the requests were rejected at the prosecution stage, leading the investigation to proceed without detention. The two sides reportedly differed in their assessment of the alleged offense, with police viewing it as an organized crime that disrupted the capital market, while prosecutors reportedly considered it closer to a case involving individual losses suffered by an early investor.
HYBE, for its part, has categorically denied the allegations. A contentious legal battle is therefore expected to continue as the prosecution investigation moves forward and the case potentially proceeds to trial.
Sources: Daum