HYBE founder and chairman Bang Si-hyuk, the music executive behind global K-pop powerhouse BTS, has been referred to South Korean prosecutors over allegations that investors were misled ahead of HYBE’s 2020 stock-market debut.
The Seoul Metropolitan Police Agency on September 3 referred Bang and four other individuals to the Seoul Southern District Prosecutors’ Office without detention, recommending prosecution over alleged fraudulent unfair trading under South Korea’s Capital Markets Act.
The case centers on transactions carried out before HYBE—then known as Big Hit Entertainment—went public in October 2020.
Police allege investors were misled before HYBE’s IPO
According to investigators, Bang and associates allegedly told existing shareholders between August and October 2019 that there were no plans for an initial public offering, while preparations for a future listing were already underway.
Police allege that some existing shareholders subsequently sold their stakes to a special-purpose company connected to private-equity interests.
At the same time, investigators say prospective investors in the private-equity fund were allegedly informed that an IPO was being planned.
Police concluded that the alleged arrangement allowed Bang and others to benefit when HYBE eventually entered the stock market.
₩263.1 billion in alleged illicit gains
One of the biggest figures in the investigation is ₩263.1 billion (about US$193.7 million).
Police say this represents the alleged illicit gains generated through the transactions after accounting for distributions, repayments, taxes and fees. A court has also approved an order preserving the amount for potential forfeiture.
Reports indicate Bang’s alleged personal gains were substantially smaller than the overall figure attributed to all parties, with Seoul Economic Daily reporting an amount in the range of ₩150 billion for Bang.
The figures should be understood as police allegations, not a court finding of guilt.
The case has already survived two failed arrest attempts
The latest referral comes after prosecutors previously rejected two police requests seeking Bang’s arrest.
In April 2026, the Seoul Southern District Prosecutors’ Office rejected an arrest-warrant request, citing insufficient evidence and requesting further investigation.
Police ultimately decided to forward the case without detention after concluding their lengthy investigation.
The investigation began in December 2024 and lasted roughly 21 months, with authorities conducting searches and questioning Bang multiple times during the probe.
Bang Si-hyuk denies wrongdoing
Bang’s legal team has maintained that the allegations are unfounded.
Following the latest referral, his lawyers said they had consistently responded to the accusations using objective evidence and facts and expected the matter to be resolved transparently through the legal process.
That distinction is important: being referred to prosecutors does not mean Bang has been convicted or that prosecutors have already decided to indict him.
The prosecution must now review the police investigation and evidence before determining what action to take. South Korean prosecutors could proceed with an indictment or seek additional investigation, particularly because earlier disagreements over the evidence and applicable legal theory led them to reject arrest requests.
Why the HYBE IPO case matters
The controversy goes beyond Bang personally because it concerns the integrity of the capital markets surrounding one of South Korea’s most internationally prominent entertainment companies.
HYBE debuted on the Korea Exchange in October 2020, with its IPO becoming one of the country’s most closely watched entertainment-sector listings.
Police are pursuing the case under provisions of the Capital Markets Act dealing with fraudulent or deceptive trading. Yonhap reported that individuals found guilty of obtaining at least ₩5 billion through fraudulent activity involving financial investment products can face at least five years in prison, potentially including life imprisonment, depending on the circumstances.
The allegations therefore carry consequences that extend well beyond HYBE’s corporate reputation.
What happens next?
The immediate focus now shifts from the police investigation to the Seoul Southern District Prosecutors’ Office.
Prosecutors will examine the evidence gathered during the approximately 21-month investigation and determine whether the case should proceed to indictment, be returned for further investigation or be handled differently.
For Bang, the latest development represents a significant escalation—but not the end of the legal process.
For HYBE, meanwhile, the case arrives as the company continues to navigate the enormous global spotlight surrounding BTS and its wider roster of K-pop artists.
The next major question is now whether prosecutors will accept the police’s interpretation of the alleged transactions as fraudulent unfair trading under the Capital Markets Act—or demand another round of investigation before making a final decision.
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