Bang Si-hyuk, the founder and chairman of K-pop powerhouse HYBE, appeared before Seoul police on September 15, 2025, for questioning over allegations of stock manipulation tied to the company’s initial public offering. The high-profile investigation centers on accusations that Bang deceived early investors and gained nearly $136 million in unfair profits during HYBE’s market debut process.
Dressed in a navy suit, Bang arrived at the Seoul Metropolitan Police Agency’s Mapo office at approximately 9:55 a.m., where he briefly addressed reporters gathered at the photo line. With a gaunt expression, he stated: “I apologize for causing concern because of my work. I will faithfully participate in today’s investigation.” When asked specifically about allegations that he instructed investors to sell shares during IPO preparations and denied listing plans, he declined to comment directly, saying only that he would explain during the investigation.
What Prompted the Investigation?
The police investigation focuses on events dating back to 2019, when HYBE (then known as Big Hit Entertainment) was preparing for its stock market debut. According to financial authorities and police statements, Bang is accused of assuring venture capital firms and other early investors that the company had no immediate plans for an initial public offering. Based on these representations, investors allegedly sold their stakes to a special purpose company established by a private equity fund connected to HYBE executives.
Financial regulators contend that HYBE was already undertaking preliminary steps for an IPO at the time, including hiring an auditor and beginning the listing process. This discrepancy forms the basis of the allegations that Bang may have provided misleading information to investors.
After HYBE went public in 2020, the special purpose vehicle sold its shares, and Bang allegedly received approximately 30% of the profits—estimated at 190 billion won ($136-137 million)—through a prior agreement with the private equity fund. Investigators also suspect the fund structure may have been used to circumvent lock-up restrictions designed to prevent major shareholders from immediately cashing out after a listing.
Legal Framework and Potential Consequences
The case is being investigated as a potential violation of South Korea’s Capital Market Act, specifically provisions regarding fraudulent transactions. Under this law, individuals found guilty of making 5 billion won or more in profits through misrepresentation of financial investment products face severe penalties, including life imprisonment or a minimum of five years in prison.
The Financial Services Commission referred Bang to prosecutors in July 2025 after completing its review of the case. This represents the toughest regulatory action available to South Korea’s financial watchdog for alleged violations of capital market regulations.
In response to the allegations, Bang’s representatives have denied any wrongdoing. They contend that other investors also realized significant profits from selling their stakes and that Bang’s gains were legitimate compensation for bearing risks associated with a put option agreement.
Police Investigation Timeline
Law enforcement officials began investigating the case in late 2024 after receiving complaints from investors. The investigation intensified in June 2025 when police raided the Korea Exchange in Seoul’s Yeongdeungpo District to seize documents related to HYBE’s IPO review process. The following month, in July 2025, officers conducted a search of HYBE’s headquarters in Yongsan as part of the evidence-gathering process.
In addition to the police investigation, special investigators from the Financial Supervisory Service with judicial authority are also examining the allegations under the direction of prosecutors, creating a multi-agency review of the case.
Bang’s Response and Company Communications
This marked Bang’s first public appearance since the investigation began. In an August 6, 2025 email to HYBE employees, obtained by media outlets, Bang pledged to cooperate “fully and transparently” with investigators and clear his name. He acknowledged that his extended absence from South Korea—reportedly due to “urgent music projects and business expansions overseas”—had raised questions but promised to return promptly to address the allegations.
“I cannot allow my personal issues to continue burdening the company and the industry,” Bang wrote in the internal communication. “The period in which I was unable to respond swiftly to the suspicions and controversies was also a painful time for me.”
Bang emphasized that his personal legal matters should not affect HYBE’s artists or employees, stating: “I will do my utmost to explain and resolve this situation so that my personal issues do not become an obstacle to your talents, capabilities and spirit of challenge.”
Market Reaction and Industry Impact
HYBE’s shares traded 2.4% lower at 285,000 won on September 15 following news of Bang’s police appearance. The company, home to global K-pop sensation BTS and other successful groups like NewJeans, has become one of South Korea’s most influential entertainment conglomerates since its successful IPO in 2020.
The investigation comes at a challenging time for the Korean entertainment industry, which has increasingly attracted international investment attention. Industry observers are watching the case closely, as its outcome could potentially affect regulatory scrutiny of corporate governance practices across South Korea’s publicly-traded entertainment companies.
The police questioning of Bang Si-hyuk is expected to continue for several hours as investigators seek to clarify the timeline of events and communications surrounding HYBE’s initial public offering.
Credits: Yonhap News, The Korea Herald, Korea JoongAng Daily
