South Korean authorities have intensified their investigation into HYBE founder and chairman Bang Si-hyuk, launching a raid on the company’s headquarters in Seoul as part of a widening probe into alleged stock manipulation and unfair trading practices.
On Thursday morning, investigators from the Financial Crime Investigation Division of the Seoul Metropolitan Police Agency executed a search warrant at HYBE’s main office in Yongsan District. The raid was part of an ongoing inquiry into claims that Bang misled early investors prior to the company’s initial public offering (IPO), resulting in personal gains estimated at approximately 190 billion won (roughly $140 million USD).
The controversy centers around events in 2019, when Bang reportedly told early investors that HYBE had no plans to go public. Based on that assurance, shares were allegedly sold to a private equity fund (PEF) linked to Bang. Authorities say that Bang later proceeded with the IPO in 2020 and received a significant share of the resulting profits—reportedly about 30% of the fund’s capital gains.
One of the executives registered at the time of the PEF’s founding was a known associate of Bang, raising further concerns about possible insider dealing. Two out of the fund’s three listed executives were reportedly former HYBE employees.
The Securities and Futures Commission, part of South Korea’s Financial Services Commission, officially filed a complaint against Bang on July 16, accusing him of violating the Capital Markets Act. A search warrant was approved the following day, targeting multiple locations including HYBE’s headquarters.
This is not the first step in the investigation. Police had already searched the Korea Exchange’s office in Yeongdeungpo District on June 30 to gather documents related to HYBE’s IPO screening process.
Jurisdictional tensions have emerged in the case, as both the police and the Financial Supervisory Service (FSS) are conducting parallel investigations, with special investigators from the FSS receiving prosecutorial authority earlier this week. However, the latest raid suggests that the police may be taking the lead.
Public scrutiny is mounting, with legal groups now exploring the possibility of a class-action lawsuit on behalf of early investors. One law firm has announced plans to recruit over 50 plaintiffs, citing potential damages and raising questions about HYBE's future on the stock exchange, including the possibility of delisting or a regulatory review.
Bang Si-hyuk has already appeared for questioning by the Financial Supervisory Service but did not attend a follow-up hearing by the Securities and Futures Commission. HYBE has issued a statement asserting that it will cooperate fully with the investigation and work to restore trust among investors and stakeholders.
This developing situation poses serious implications not only for Bang and HYBE but for transparency in South Korea’s capital markets more broadly. Further updates are expected as authorities continue their investigation.