Police chase BTS agency chair Bang Si Hyuk in 400 Billion KRW stock fraud probe, search warrant issued against HYBE
Bang Si Hyuk, the founder and chairman of HYBE (BTS label), is at the center of an intensifying police investigation into alleged fraudulent transactions, and now, the police have taken a critical next step.
Police Authorities have officially applied for a search and seizure warrant against HYBE and related parties.
According to Newsen, the Seoul Metropolitan Police's Financial Crime Investigation Unit submitted the request to the Securities Crime Joint Investigation Unit of the Seoul Southern District Prosecutors' Office. This is their second attempt after an earlier request was rejected in early May.
What Is Bang Si Hyuk's Controversy?
Bang Si Huk and his close associates misled investors in 2019 about HYBE's plans to go public. At the time, the company, then known as BigHit Entertainment, reportedly told certain investors there were no immediate IPO (Initial Public Offering) plans, citing unfavorable market conditions. However, around that same time, HYBE had already applied for a designated audit, a formal and significant first step in the process of preparing for an IPO. The case involves a 400 billion KRW (approx. USD 290 million) deal, allegedly tied to misleading investors and hidden profit-sharing.
Why is The Police Investigating?
Police now believe this discrepancy may not have been accidental. HYBE was quietly laying the groundwork for its blockbuster stock market debut in 2020. Some early investors, taking management's words at face value, sold their shares, private equity firms like Easton PE and Newmain Equity stepped in and bought stakes later that year.
The Financial Supervisory Service is also conducting its review, raising the stakes further. If police can prove that HYBE intentionally misled investors during this period, the case could evolve into a significant capital markets scandal.
For now, prosecutors are reviewing the warrant request. If approved, it could give investigators access to crucial internal materials from HYBE.
But the question remains: Will this affect BTS?
The answer is both no and yes.
No, because BTS as a group is not involved in the investigation. They have no connection to the alleged fraudulent transactions, and their name hasn't come up in any part of the scandal. The members are completely separate from the business dealings under scrutiny.
Yes, in the sense that BTS is closely tied to HYBE and its subsidiary BigHit Music. Public perception of the company may indirectly cast a shadow, simply because of that association. However, it's unlikely to have any lasting impact on the group itself. One can take it mostly as no effect will fall upon BTS.
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