HYBE Chair Bang Si-hyuk (left) and HYBE headquarters located in Yongsan-gu, Seoul. Kyunghyang Shinmun file photo
HYBE Chair Bang Si-hyuk faces possible arrest.
According to Yonhap News Agency on the 21st, the Seoul Metropolitan Police Agency's Financial Crime Investigation Unit applied to the court that day for an arrest warrant for Chair Bang on suspicion of fraudulent unfair trading under the Capital Markets Act.
Police allege that in 2019, ahead of HYBE's KOSPI listing (October 2020), he induced existing investors, including venture capital firms (VCs), to sell their shares by falsely notifying them that “no plan for an initial public offering (IPO) or that it would be delayed”.
Police believe he accumulated those shares through a special-purpose company (SPC) under a private equity fund established with contributions from HYBE executives, then profited from listing gains. The police estimate the illicit gains at about 190 billion won.
The Seoul Metropolitan Police Agency's Financial Crime Investigation Unit conducted a search and seizure of the Korea Exchange on June 30 last year, and in July also executed a warrant at HYBE's headquarters in Yongsan-gu, Seoul. As for Chair Bang, starting with the first summons on September 15 of the same year, they questioned him a total of five times as a suspect. Throughout the investigation period, he was under a travel ban.
The Financial Services Commission's Securities and Futures Commission also, on July 16 last year, separately filed a complaint with and notified the prosecution regarding Chair Bang and former HYBE executives on suspicion of unfair trading under the Capital Markets Act.
After the summons investigation late last year, police continued their legal review for more than two months. In January this year, they reportedly held off applying out of concern that, if the warrant were dismissed, investigative capacity would be weakened. At a regular briefing on the 6th of this month, Seoul Police Commissioner Park Jeong-bo said, “The legal review is almost complete. We should be able to reach a conclusion in the not-too-distant future”.
With the investigation's conclusion imminent, a diplomatic variable also emerged. The U.S. Embassy in South Korea is said to have sent a letter to police early this month requesting that Chair Bang's travel ban be lifted. The letter cited schedules related to BTS concerts in the United States set to begin at the end of this month.
Previously, Bang's side has maintained the stance that “it complied with the relevant laws and regulations at the time of the listing and that there is nothing legally problematic”.
After receiving the warrant application, the court will set a date for a pre-arrest suspect interrogation (a substantive warrant review), and once Bang appears in person, it will make a final decision on whether to detain him.
