HYBE Chairman Bang Si Hyuk Faces Criminal Probe Over $290 Million Fraud Allegations; CFO Resigns Amid Raid

South Korean authorities are investigating HYBE chairman Bang Si Hyuk for alleged fraudulent securities transactions worth 400 billion KRW ($290 million). The case involves accusations of misleading investors before the company’s IPO, leading to potential legal consequences under the Capital Markets Act .

Former HYBE CFO Lee Kyung Joon, who also served as an internal director at ADOR (HYBE’s subsidiary managing NewJeans), resigned abruptly as the probe intensified. HYBE later referred to him as a “general employee,” contradicting shareholder records showing his executive role .

Key Details of the Investigation

Prosecutors allege that in 2019, Bang Si Hyuk told investors HYBE had no plans for an IPO, prompting them to sell shares to a private equity fund (PEF) linked to him. Meanwhile, HYBE was secretly preparing to go public, including hiring an auditor for the process.

The Financial Supervisory Service (FSS) found evidence that Bang entered a profit-sharing agreement with the PEF, receiving 30% of investment returns—totaling $290 million. These deals were not disclosed in HYBE’s IPO filings, violating transparency laws.

If convicted, Bang could face life imprisonment or a minimum five-year sentence, as the gains exceed the 5 billion KRW threshold for severe penalties under the Capital Markets Act .

Who’s Involved?

HYBE’s leadership includes some of the most powerful figures in the entertainment business:

• Bang Si Hyuk – Founder and Chairman of HYBE
• Yoon Seok Joon – Global & Business CEO
• Park Ji Won – HQ & Management CEO
• Lee Jin Hyung – Chief Operating Officer 
• Kim Tae Ho – CSO
• Kim Joong Dong – CIO
• Lee Kyung Joon – Former CFO

All these executives are now under close observation as questions arise about the company’s internal ethical governance practices. As the case unfolds, it remains to be seen whether additional resignations or disciplinary actions will follow.

Police Raid and Internal Fallout

A search and seizure operation at HYBE’s headquarters confirmed the probe’s seriousness. Investigators are examining financial records, leadership decisions, and possible insider trading.

Netizens and fans demand accountability, stressing that HYBE’s artists (BTS, NewJeans, etc.) shouldn’t suffer due to executive misconduct. Online discussions highlight concerns over corporate governance and investor trust.

HYBE’s Response

A HYBE spokesperson stated:

“All transactions were reviewed by legal counsel and conducted lawfully.”

However, financial experts warn that unchecked profit manipulation by major shareholders could destabilize market confidence.

Broader Implications

This case mirrors past K-pop industry scandals involving financial opacity. Analysts note HYBE’s rapid growth—from Big Hit Entertainment to a multinational giant—may have outpaced its compliance frameworks.

With ADOR’s Min Hee Jin previously clashing with HYBE over ethics (e.g., rejecting “advanced album purchases” to inflate sales), the scandal reinforces scrutiny over HYBE’s business practices.

Credits: Allkpop, Kbizoom, Financial Supervisory Service reports

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