HYBE Chairman and founder Bang Si-hyuk has been referred to prosecutors according to a report by Chosunbiz. It was done over allegations that he and four others had misled investors before the company’s stock market debut and subsequently obtained about 263.1 billion won in alleged illicit gains.

The Seoul Metropolitan Police Agency’s Financial Crimes Investigation Division referred Bang to the Seoul Southern District Prosecutors’ Office without detention on September 3, 2026. Four others were also referred in connection with the case, including a HYBE executive, former chief financial officer Kwon, Eastone PE CEO Yang and New Main Equity CEO Kim.

The allegations center on events in 2019, when HYBE was still known as Big Hit Entertainment and was preparing for its eventual initial public offering. Investigators allege that Bang and other HYBE officials gave existing shareholders the impression that there were no immediate plans for an IPO.

Between August and October 2019, some shareholders allegedly sold their stakes to a private equity fund linked to people close to Bang. Police further allege that the same parties later told investors in the fund that an IPO was being planned, helping the fund raise money to purchase HYBE shares.

HYBE eventually went public in October 2020. According to investigators, Bang Si-hyuk and others had reached a confidential arrangement that allowed them to receive part of the profits made when the private equity fund sold its HYBE shares after the listing. Police estimate the resulting alleged unfair gains at 263.1 billion won.

A court has approved an order preserving the full amount ahead of possible forfeiture. Such an order prevents assets believed to be connected to alleged criminal proceeds from being transferred or disposed of before the case is resolved.

Police said the alleged conduct involved concealing IPO-related information from existing shareholders while using it to benefit management and private equity participants.

Bang Si-hyuk’s IPO related case moves to prosecutors as investigation concludes

The case began with a preliminary inquiry in December 2024 and was formally converted into a full investigation in May 2025. Police later described July 2025 as the start of their full-scale probe. South Korea’s Securities and Futures Commission also filed a complaint concerning the transactions, bringing financial authorities further into the investigation.

Authorities have examined transactions involving HYBE shares, a private equity fund and an alleged undisclosed agreement under which Bang reportedly received about 30% of profits from the transactions. Police estimate the alleged amount involved at around 190 billion won, approximately $129 million. The referral does not mean Bang Si-hyuk has been indicted or found guilty, as prosecutors will now assess the evidence and determine the next steps.

Investigators are examining whether a private equity fund sold HYBE shares following the company’s 2020 stock market debut and whether Bang later received approximately 30% of the resulting profits through an undisclosed arrangement. Police have estimated the alleged profits connected to the transactions at roughly 190 billion won.

Authorities are investigating the allegations under South Korea’s Capital Markets Act, which prohibits deceptive or misleading practices in financial transactions. Police say the case concerns conduct they believe could undermine the fairness and credibility of the country’s capital markets.

Investigators searched the Korea Exchange in June 2025 for documents connected to HYBE’s listing review. They raided HYBE’s Seoul headquarters the following month and collected documents and other materials related to the transactions.

Bang Si-hyuk underwent five rounds of questioning between September and November 2025. His first session on September 15 lasted more than 14 hours, followed by questioning on September 22 and November 5, 7 and 9. No further summons involving Bang Si-hyuk were reported after November.

Police sought an arrest warrant for Bang twice in April 2026. Prosecutors returned both requests, citing insufficient grounds for detention and requesting additional investigative work. Police subsequently decided to refer Bang’s case to prosecutors without taking him into custody.

Bang Si-hyuk has been under a travel restriction since August 2025. The measure drew renewed attention in April 2026 after the U.S. Embassy in South Korea reportedly asked the Korean National Police Agency to cooperate with Bang’s travel to the United States in connection with BTS’s ongoing world tour.

A former HYBE chief investment officer surnamed Kim is being handled separately. Kim reportedly left South Korea while the investigation was underway, prompting police to obtain an arrest warrant and seek a wanted notice and an Interpol Red Notice.

Bang Si-hyuk’s defense team has argued that investigators’ concerns can be addressed through objective evidence and supporting materials. The team said it expects the allegations to undergo transparent examination during the prosecution stage.

The investigation has also influenced investor sentiment toward HYBE. The company’s shares reportedly fell 2.9% after reports that authorities had sought Bang’s arrest, while the broader KOSPI index rose 1.8%.

The case now rests with prosecutors, who can seek an indictment, request additional investigative measures or take other legal action after reviewing the police file. Bang Si-hyuk has not been convicted of any wrongdoing.

Under the Capital Markets Act, fraudulent trading involving financial investment products can carry significant penalties. Where alleged unlawful profits reach at least 5 billion won, the law permits punishment ranging from a minimum five-year prison sentence to life imprisonment.