Police reapply for search warrant in probe of HYBE chairman’s alleged stock fraud

HYBE Chairman and producer Bang Si-hyuk appears on tvN’s variety show “You Quiz on the Block.” Captured from broadcast

Police have resubmitted a request for a search and seizure warrant in their investigation of HYBE Chairman Bang Si-hyuk over allegations of fraudulent stock transactions involving 400 billion won ($295 million).

According to police and legal sources on Thursday, the Seoul Metropolitan Police Agency’s financial crimes unit filed the request with the Seoul Southern District Prosecutors’ Office the previous day.

Investigators are seeking to obtain documents from the Korea Exchange, Financial Supervisory Service (FSS), and securities firms to trace financial transactions. The Financial and Securities Crime Joint Investigation Division, led by chief prosecutor Ahn Chang-joo, is currently reviewing whether to approve the request.

Bang is suspected of violating the Capital Markets Act by misleading existing shareholders into believing that HYBE had no plans for an initial public offering (IPO), prompting them to sell their shares.

Authorities believe Bang then proceeded with the IPO and profited around 400 billion won in the process. Police have been investigating the case since December last year. Their initial request for a search warrant was rejected by prosecutors in late April.

The FSS is also conducting a separate investigation into the case and is planning to formally refer Bang to the Seoul Southern District Prosecutors’ Office in the near future. HYBE has denied any wrongdoing, saying, “All transactions were conducted within legal boundaries after thorough legal review.”

In a separate case, prosecutors recently raided HYBE's headquarters in Yongsan, Seoul, in connection with a former executive accused of insider trading.

The Seoul Southern District Prosecutors’ Office is investigating a former finance executive, identified as A, who allegedly used non-public information to purchase shares in YG Plus — a subsidiary of YG Entertainment — in 2021, prior to HYBE’s investment announcement. A is accused of profiting illegally to the tune of 240 million won.

HYBE said it has cooperated with authorities and provided the requested materials, emphasizing that the individual in question had already left the company.

This article from the Hankook Ilbo, the sister publication of The Korea Times, is translated by generative AI and edited by The Korea Times.