South Korean entertainment giant HYBE, home to global stars like BTS, SEVENTEEN, and TXT, is under intense scrutiny as the National Tax Service (NTS) launches a special tax investigation. The probe targets alleged stock manipulation and tax evasion linked to HYBE’s 2020 initial public offering (IPO). This comes alongside an ongoing police investigation into Chairman Bang Si-hyuk for suspected fraudulent trading practices.
Tax Authorities Investigate HYBE for Potential Tax Evasion
On July 29, officials from the NTS Seoul Regional Office’s 4th Bureau of Investigation arrived at HYBE’s headquarters in Yongsan, Seoul, without prior notice. They seized financial documents and records as part of a broader probe into 27 companies and individuals suspected of manipulating stock prices and evading taxes. The total estimated tax evasion across all cases is around 1 trillion won ($718.7 million).
This marks HYBE’s first tax audit since 2022, when the company was fined billions of won in back taxes. The current investigation focuses on whether HYBE engaged in illegal financial activities during its IPO process, including hiding profits or misreporting transactions.
Chairman Bang Si-hyuk Accused of Stock Fraud
The tax probe follows a police raid on HYBE’s offices last week. Authorities are investigating allegations that Bang Si-hyuk misled early investors in 2019 by claiming HYBE had no plans to go public. Investors were reportedly persuaded to sell their shares to a private equity fund connected to Bang. After HYBE’s October 2020 IPO, the fund sold its shares, and Bang allegedly received 30% of the profits, totaling 190 billion won ($144 million).
Police had previously attempted to secure search warrants twice but were denied. A third request was approved in July, leading to the raid. The Financial Supervisory Service (FSS) has also joined the investigation, examining potential violations of the Capital Markets Act.
How This Affects HYBE’s Business and Artists
HYBE manages some of K-pop’s biggest acts, including BTS, whose 2026 comeback is highly anticipated. The company has also been involved in internal conflicts, such as the public dispute with its subsidiary ADOR and girl group NewJeans.
Fans and industry experts are concerned about how the legal issues might impact artist promotions and HYBE’s global expansion. The company has continued projects like HYBE Cine Fest, but the ongoing investigations could damage its reputation and investor confidence.
What Happens Next?
The NTS and police are conducting parallel investigations. If found guilty, Bang Si-hyuk could face jail time and heavy fines. HYBE has not yet released an official statement, but sources say the company is fully cooperating with authorities.
The case highlights growing scrutiny over corporate governance in South Korea’s entertainment industry. With HYBE being a major player, the outcome could set a precedent for how similar cases are handled in the future.
Credits: Compiled from reports by The Korea Herald, Yonhap News, and KBS.
